Volkswagen halted production of its best-selling Golf hatchback on Monday as the fallout widened from an unprecedented dispute with a supplier of seat and transmission components.
The shutdown, which started with the Passat sedan on Thursday, is now set to impact about 10 percent of Volkswagen’s German workforce, the automaker said in a statement. As many as 27,700 workers across six factories could be sent home amid a shortage of parts supplied by subsidiaries of Bosnian-based Prevent Group. Golf production is set to be halted until at least Saturday.
“We are really surprised that the fight is escalating to a level where production is severely impacted,” Sascha Gommel, an analyst at Commerzbank, said in a note. “The dispute is coming during an inconvenient time for VW,” with its reputation still marred by the emissions-cheating scandal.
The company has restarted talks with one supplier after the unprecedented dispute.
Negotiations with the supplier of seat and transmission parts will resume later today, a spokesman said. Prevent Group's Car Trim seat-component division and ES Automobilguss transmission-parts unit suspended deliveries when Volkswagen refused to reimburse the suppliers after dropping a contract. The parts makers had demanded compensation of €58 million (Dh240.5m), the German newspaper Sueddeutsche Zeitung reported on Sunday.
“At least the negotiators are at the table again today,” Olaf Lies, a Volkswagen supervisory board member and economy minister of the state of Lower Saxony, where the car maker is based, said on Monday. “It will not only be about the question of the current contract, which has now been rescinded, but it will probably also be about the question of how the next months and years will look.”
The production stop at VW’s site in Wolfsburg alone could cost as much as €100m a week, UBS analysts calculated. The threat to earnings comes as the car maker seeks to boost sagging profit at its namesake brand by lowering annual spending by €1 billion. The supplier last week said Volkswagen is shifting its problems to suppliers and “exploiting” its dominant position in the market.
The order cancelled by VW involved a €500m deal with Car Trim that was scheduled to start next year, a person familiar with the matter said. The parts maker said it wants the car manufacturer to pay for the plant alterations it made to provide the services.
The conflict highlights the degree to which a parts maker can disrupt output as car builders rely increasingly on suppliers to produce a large portion of their vehicles while squeezing them to cut prices. Volkswagen, like most car makers, works on a just-in-time manufacturing principle, meaning its parts are delivered directly to the assembly line without being stored in a warehouse first. While that lowers costs, it also means that when there is a disruption from a supplier, it quickly ripples through the production chain.
Volkswagen stock has declined 10 per cent this year, compared with a 1.9 per cent drop in Germany’s benchmark DAX Index.
VW is under pressure to reduce costs as it grapples with lawsuits and regulatory investigations after disclosing last September that 11 million diesel-powered cars were equipped with software designed to cheat on emissions tests. It has set aside €18bn to cover worldwide costs related to the scandal.
Volkswagen’s works council head Bernd Osterloh said on Friday that the suppliers are being “reckless and asocial” in their disregard for workers by stopping the deliveries. VW said workers producing the Passat will be on shortened work hours until Wednesday, while Golf production will be interrupted for a week, the spokesman said.
A German court has ordered the supplier to resume deliveries, and an appeal in one of the cases has been set for August 31.
VW in the meantime has asked the court to fine the supplier and let the car maker go to the factories and load up the parts on its own, the court in Braunschweig said last week. The parts maker has until this week to respond, and the court will decide then on VW’s request, according to the release.
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2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
The specs
Engine: 3-litre twin-turbo V6
Power: 400hp
Torque: 475Nm
Transmission: 9-speed automatic
Price: From Dh215,900
On sale: Now
Banned items
Dubai Police has also issued a list of banned items at the ground on Sunday. These include:
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Political flags or banners
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Bikes, skateboards or scooters
Match info
Arsenal 0
Manchester City 2
Sterling (14'), Bernardo Silva (64')
THE LIGHT
Director: Tom Tykwer
Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger
Rating: 3/5
The%20team
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Day 1, Abu Dhabi Test: At a glance
Moment of the day Dimuth Karunaratne had batted with plenty of pluck, and no little skill, in getting to within seven runs of a first-day century. Then, while he ran what he thought was a comfortable single to mid-on, his batting partner Dinesh Chandimal opted to stay at home. The opener was run out by the length of the pitch.
Stat of the day - 1 One six was hit on Day 1. The boundary was only breached 18 times in total over the course of the 90 overs. When it did arrive, the lone six was a thing of beauty, as Niroshan Dickwella effortlessly clipped Mohammed Amir over the square-leg boundary.
The verdict Three wickets down at lunch, on a featherbed wicket having won the toss, and Sri Lanka’s fragile confidence must have been waning. Then Karunaratne and Chandimal's alliance of precisely 100 gave them a foothold in the match. Dickwella’s free-spirited strokeplay meant the Sri Lankans were handily placed at 227 for four at the close.
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Saturday's results
West Ham 2-3 Tottenham
Arsenal 2-2 Southampton
Bournemouth 1-2 Wolves
Brighton 0-2 Leicester City
Crystal Palace 1-2 Liverpool
Everton 0-2 Norwich City
Watford 0-3 Burnley
Manchester City v Chelsea, 9.30pm
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%201.8-litre%204-cyl%20turbo%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E190hp%20at%205%2C200rpm%0D%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20320Nm%20from%201%2C800-5%2C000rpm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESeven-speed%20dual-clutch%20auto%0D%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%3C%2Fstrong%3E%206.7L%2F100km%0D%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh111%2C195%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENow%3C%2Fp%3E%0A
How the UAE gratuity payment is calculated now
Employees leaving an organisation are entitled to an end-of-service gratuity after completing at least one year of service.
The tenure is calculated on the number of days worked and does not include lengthy leave periods, such as a sabbatical. If you have worked for a company between one and five years, you are paid 21 days of pay based on your final basic salary. After five years, however, you are entitled to 30 days of pay. The total lump sum you receive is based on the duration of your employment.
1. For those who have worked between one and five years, on a basic salary of Dh10,000 (calculation based on 30 days):
a. Dh10,000 ÷ 30 = Dh333.33. Your daily wage is Dh333.33
b. Dh333.33 x 21 = Dh7,000. So 21 days salary equates to Dh7,000 in gratuity entitlement for each year of service. Multiply this figure for every year of service up to five years.
2. For those who have worked more than five years
c. 333.33 x 30 = Dh10,000. So 30 days’ salary is Dh10,000 in gratuity entitlement for each year of service.
Note: The maximum figure cannot exceed two years total salary figure.
Women & Power: A Manifesto
Mary Beard
Profile Books and London Review of Books
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
The Details
Kabir Singh
Produced by: Cinestaan Studios, T-Series
Directed by: Sandeep Reddy Vanga
Starring: Shahid Kapoor, Kiara Advani, Suresh Oberoi, Soham Majumdar, Arjun Pahwa
Rating: 2.5/5
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
- Avoid suspicious social media ads promoting fraudulent schemes.
- Only invest in crypto projects that you fully understand.
- Critically assess whether a project’s promises or returns seem too good to be true.
- Only use reputable platforms that have a track record of strong regulatory compliance.
- Store funds in hardware wallets as opposed to online exchanges.
The Brutalist
Director: Brady Corbet
Stars: Adrien Brody, Felicity Jones, Guy Pearce, Joe Alwyn
Rating: 3.5/5
