VW Production Delays Due To Legal Dispute

Volkswagen (Xetra: 766400 - news) (VW) is facing production delays at six plants across Germany, affecting thousands of jobs, due to a legal dispute with two of its suppliers.

The carmaker said it was making arrangements to adjust the working hours of 27,700 staff affected by the interruptions.

"Production at several Volkswagen (LSE: 0P6N.L - news) plants has been interrupted as a result of a halt in component delivered by external suppliers," VW said in a statement.

Suppliers CarTrim which makes seats, and ES Automobilguss, which makes parts used in gearboxes, have stopped delivering to VW due to a contract dispute.

They are seeking compensation after saying they lost tens of millions of euros after VW cancelled a contract.

The German government has called for a quick solution.

"We assume and also expect that the companies concerned can resolve the open questions as soon as possible," said Andreas Audretsch from the German Economy Ministry.

They face "a high level of responsibility to tackle and solve these problems as constructively as possible," he added.

Volkswagen says it was continuing its efforts to reach an agreement with suppliers (Other OTC: UBGXF - news) .