Supplier dispute with VW: Prevent subsidiary closes Leipzig plant

08/06/2018

Supplier dispute with VW Prevent subsidiary closes Leipzig plant

DPA

Worker of the New Halberg font

Around 800 jobs are to be canceled: A subsidiary of the VW supplier Prevent wants to close its Leipzig foundry. The companies reproach each other.

The dispute between the car supplier Prevent and Volkswagen now meets the employees. The Prevent company Neue Halberg Guss (NHG) plans to close the Leipzig location by the end of 2019.

The company intends to negotiate a social plan with the works councils for its around 800 employees, said plant manager Thomas Pregel. NHG accused Volkswagen of having reduced the purchase quantity, at the same time costs should be reduced. Volkswagen said it did not comment on entrepreneurial decisions of its suppliers.

The VW statement also said: “The fact is: With the Neue Halberg Guss, we have valid and untimed supply contracts and have already made several contributions to the restructuring of the NHG” and to safeguarding their jobs.

Long-standing conflict between Prevent and VW

At present, chances are being sought for a longer-term solution that would be mutually supportive and that would again contribute to job retention. The restructuring needs of NHG has long been known and “not to charge VW”. The closure of the Leipzig plant was first reported by the Saarländischer Rundfunk.

The conflict between the Wolfsburg-based company and the Bosnian entrepreneurial family Hastor with their supplier group Prevent smolders for a long time, In 2015, Prevent acquired the seat cover manufacturer Keiper in Brazil. It followed delivery stop, price increases and finally the termination by VW. The incident brought Volkswagen 160 days out of production, a loss of 140,000 vehicles and forced leave for around 18,000 employees. Daimler is also located with the supplier group in the clinch.

In 2016, a delivery stop at the Prevent spin-offs ES Automotive Casting and Car Trim caused ribbons in several VW factories to be shut down due to canceled delivery agreements. The foundry NHG had Prevent taken over just a few months ago, through Prevent’s Castanea Rubra Assets GmbH.

IG Metall threatens to strike

NHG now announced that the closure of the Leipzig plant was “inevitable, otherwise the company as a whole would be endangered in its existence.” The operation in Saarbrücken with currently about 1300 employees, however, continues.

The IG Metall in Saarbrücken is threatened with a strike: the workforces in Leipzig and Saarbrücken will “fight for their jobs”. The workers were not prepared to surrender to their fate without a fight. The Metallers decided demands for a social collective agreement.

NHG produces crankcases, cylinder heads and crankshafts, especially for cast iron diesel engines. However, the demand for diesel-powered cars in Germany has been falling for months as a result of “diesel gate” and in the face of impending diesel driving bans clear. Gray cast iron is also less popular in times of lightweight construction.

At the beginning of April, Volkswagen terminated the supply contracts with ES Automobilguss, Car Trim and another Prevent subsidiary without notice. Prevent threatened with a claim for damages. Even then, VW said: “Volkswagen is dependent on an always plannable and trusting cooperation with its suppliers.” Therefore, existing business relationships would be reviewed regularly.

la / dpa / Reuters

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