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VW hits supply-crisis following emissions scandal

2016-08-19 13:46

THE SAGA DEEPENS: German automaker Volkswagen is now employing workers on a part-time basis in the aftermath of its emission scandal. Image: AP / Michael Sohn

Frankfurt - Volkswagen said Thursday (August 18) production at several factories has been severely disrupted due to a shortage of components, a new headache for the German car giant that is still grappling with a massive pollution cheating scandal.

Work at the several factories, including at its largest facility in Wolfsburg, has been hit. At a factory in Emden, 7200 workers have been put on part-time due to missing parts.

VW told AFP: "A Volkswagen supplier has suspended contractually agreed deliveries of components. This has led to bottlenecks in production."

The auto giant said it obtained a court injunction earlier in August to compel the supplier to resume deliveries, but that has "not been complied with".

Working flexi-hours

VW added: "Since we can't currently foresee how things will develop, we're examining making working times flexible in parts of our Wolfsburg site."

The company did not name the supplier.

But German news agency DPA said there were in fact two suppliers that had disrupted their deliveries - one that makes textiles and leather for car interiors and another that specialises in cast parts for gearboxes.

READ: VW emissions scandal by the numbers

Works council member Guido Mehlhop told DPA: "This is more than just annoying, especially when you know that the court already issued an injunction requiring the suppliers to deliver the parts as contractually agreed.

"Apparently someone is trying to stage a cliff-hanger on the backs of the workers as quickly as possible."

A court spokesman said that the auto giant has a month to appeal to a higher court.

Volkswagen has been battling to get past its biggest crisis, which erupted in September 2015 after it was forced to admit that it had installed sophisticated software into 11 million diesel engines with the express purpose of duping emissions tests.

Dropping shares

The shock revelation led to a 40% plunge in the company's share price, wiping out some 25-billion euros in market capitalisation in just two days.

VW shares were down 0.45% in early trading in Frankfurt Thursday, as well.

Germany's consumer association chief Klause Mueller stepped up calls for the company to offer compensation to affected customers in Germany, as it has promised to do in the US.

Mueller told regional newspaper Rheinische Post: "Anyone who defrauded their customers like Volkswagen did should provide damages."

READ: Emissions scandal - Volkswagen reaches $14.7-billion settlement

In July VW obtained preliminary approval from a California judge for a $14.7-billion settlement over the scandal.

The settlement includes $10-bn for compensation to affected car owners. In addition, the group will create a $2.7-bn fund for environmental remediation, and provide $2-bn to promote the use of "zero emissions" vehicles within the US.


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