Status: 03/14/2022 8:18 p.m
VW factories have to stop for weeks because important parts from Ukraine are missing. German suppliers are also suffering from this, because Volkswagen is canceling orders on a large scale.
In a normal week, the company KKT Frölich in Osterode am Harz builds up to 40,000 bell cranks for the VW group. Inconspicuous plastic parts for transmissions, installed thousands of times in models from VW, Audi or Skoda. But overnight, Volkswagen canceled all orders for the month of March – without any compensation payment. And without a guarantee that the ordered parts will still be bought at a later date.
A fifth of the turnover breaks away
Company boss Sven Vogt is frustrated. The fact that VW stopped all orders from one day to the next means for him that 20 percent of his monthly sales break away. Two out of three production plants are idle. At the same time, Vogt has to continue paying his own suppliers, who supply raw materials and parts, in March.
“We don’t even know what else we will buy from VW in the future,” says Vogt. The KKT Frölich company can intercept the lost orders because Volkswagen is not the only customer. As chairman of the employers’ association of the German rubber industry, Vogt knows the situation in many other supplier companies in northern Germany. The situation is “devastating”, especially in small and medium-sized companies.
Companies “highly indebted”
Since the Corona crisis, these companies have been “high in debt” anyway,” Vogt describes the situation. If major car manufacturers are now canceling their orders, the companies would no longer know “how to pay wages, suppliers and electricity bills at the end of March”.
Volkswagen is particularly affected by the economic consequences of the Ukraine war. Because important wiring harnesses are no longer delivered from Ukraine, VW has to take forced breaks in some plants. Among other things, the production of electric cars in Dresden and Zwickau is suspended. At the main plant in Wolfsburg, the production lines stand still. The brands Audi, Porsche and VW Commercial Vehicles cannot produce as usual either. Depending on the location, the downtime applies on a weekly or daily basis.
Between a lull and extra shifts
How to proceed is open. And it is unlikely that CEO Herbert Diess will provide concrete answers at today’s annual press conference. Automotive suppliers like KKT Frölich in Lower Saxony can only wait and hope.
However, company boss Vogt is annoyed by the way powerful major customers are dealing with the current situation. Goods are canceled spontaneously, but at the same time maximum flexibility is required. You fluctuate between a lull and sudden extra shifts at the weekend, between zero and a hundred,” complains Vogt. It’s almost impossible to organize that with the employees.