Volkswagen shortens the working hours of 27,700 staff members following supplier dispute and plant disruption

Francesca Washtell
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Press Day At Volkswagen Factory
The Golf production line at the company's Wolfsburg plant is experiencing delays (Source: Getty)

A dispute between Volkswagen and two of its suppliers has caused production delays at six of its plants and has forced the company to cut the working hours of 27,700 employees.

The suppliers are seeking compensation following claims they have lost significant revenues, which could run into millions of euros, after Volkswagen cancelled a contract, Reuters reported.

The carmaker's main Wolfsburg factory is among the plants hit by hold-ups as a result of the disagreement.

The company is preparing approximately 10,000 of its workers at Wolfsburg who work on Golf car production to revert to shorter or flexible working hours between 22 and 27 August.

Read more: VW's European market share has fallen again

If Volkswagen had to shut down the Wolfsburg plant for a week the gross profit loss would be around €100m (£86m), UBS analysts have said.

Plants in Emden, Zwickau, Kassel, Salzgitter and Braunschweig are also preparing to shorten staff working hours from mid-to-late August.

Some 7,500 employees at its Emden factory in northwest Germany were due to be on a more flexible timetable from 18 to 24 August, while 6,000 workers at Zwickau are scheduled to be on a temporary timetable between 22 and 26 August.

"Production at several Volkswagen plants has been interrupted as a result of a halt in component deliveries by external suppliers," the company said in a statement today.

Read more: VW under pressure from EU over compensation after diesel scandal

"Although Braunschweig District Court has issued injunctions obliging the suppliers to resume deliveries, the suppliers have not as yet met their obligations. Volkswagen continues its efforts to reach agreement with the suppliers."

Last month, the German car manufacturer posted an ad-hoc trading update posting operating results before special items "significantly higher than market expectations" for the first half of the year, at €7.5bn.

The group was engulfed in scandal last year when it was revealed that the company had fitted 11m cars with “defeat device” software, designed to cheat emissions tests.

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