VW announces supply contracts: Prevent accuses Volkswagen of “serious breach of law”

05/04/2018

VW announces supply contracts Prevent accuses Volkswagen “serious breach of law” before

DPA

Prevent in Warmenau near Wolfsburg: The dispute with VW escalates

The Prevent Group, which became known mainly through its dispute with Volkswagen, has announced redundancies and short-time work at its sites in Schönheide, Plauen and Stendal. The background was Volkswagen’s delivery contracts on March 21 with the Prevent subsidiaries ES Automobilguss GmbH in Schönheide, Cartrim GmbH in Plauen (both in Saxony) and Prevent Foamtec in Stendal (Saxony-Anhalt).

For its part, the carmaker emphasized in a statement: “Volkswagen relies on an always predictable and trusting cooperation with its suppliers.” Therefore, existing business relationships would be reviewed regularly. The aim is to “minimize the negative impact of possible supply chain disruptions on our own production in the interests of our customers, employees, dealers and other suppliers, so we have taken appropriate action in this specific case.”

According to a report of the “Wirtschaftswoche”, Prevent’s exit from the car costs the carmaker around 200 million euros. Of this would need 159 million euros to enable other suppliers to take over the orders, the paper wrote, citing an internal VW presentation. In addition, there would be claims for damages in an unknown amount. “We do not comment on internal documents,” VW said.

Prevent announced that “in the short term” there will be short-time work and layoffs for around 700 employees. If possible, there should be transfers. 90 employees of Prevent Foamtec in Stendal had already received the notice. Earlier, the Magdeburg newspaper “Volksstimme” reported that the subsidiary Prevent Foamtec had been discontinued.

Prevent wants to initiate “legal protective measures”

Prevent now announced that the extraordinary termination of supply contracts by VW was “without legal and economic reason”. The supplier threw Volkswagen Show stock market chart “serious breach of the law”. Even with long-term contracts since March 22, no parts have been removed. “Legal protection measures” would be initiated.

Behind the supplier Prevent stands the investor family Hastor, which had made headlines with the failed takeover of power at the Bavarian automotive supplier Grammer and shut down the production lines in several VW factories in 2016, mainly in Wolfsburg and Emden. This happened despite interim injunctions of the regional court Braunschweig, which the suppliers should commit to the resumption of the supply. The background was a dispute over a contract canceled by VW.

Also read: The Empire of the Bosnian Hastor clan

In Brazil, too, there was trouble with a Prevent subsidiary – the result was 160 days of production stoppage, 140,000 fewer vehicles were built, and around 18,000 employees were on forced leave. There was damage in the hundreds of millions.

In January it had become known that Prevent had taken over another auto parts supplier. The Bundeskartellamt has approved the takeover of the Halberg Guss in Germany with its approximately 3000 employees by Prevent belonging to Castanea Rubra Assets GmbH, said a spokesman for the investors at that time. According to the information, Halberg produces crankcases, cylinder heads and crankshafts for cars and trucks in Saarbrücken, Leipzig and Cape Town in South Africa. According to the company, customers include all major car manufacturers, including VW.

mg / AFX

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