Two suppliers cut off VW's parts over a contract row — 27,700 workers stopped

In August 2016, just as Volkswagen was still reeling from its diesel emissions scandal, two of its suppliers stopped delivering parts. CarTrim, which makes car seats, and ES Automobilguss, which makes cast-iron gearbox components — both owned by the Prevent Group — refused to ship over a contract dispute. They said VW had cancelled an order and demanded compensation for the income they lost.

The effect was immediate. With seats and gearbox castings in short supply, Volkswagen had to halt production at several of its ten German factories; four plants stopped at once and two more were due to follow. The Golf and Passat lines were among those hit, and 27,700 workers were sent home or put on short-time work. A single missing component, it turned out, was enough to idle an entire car plant.

Volkswagen, which usually dictates terms to its supply chain, had little leverage: the parts were specialised and the suppliers were willing to stop. After 20 hours of negotiations through the night, VW reached an agreement and the suppliers resumed deliveries. The episode exposed how vulnerable even the world's largest carmaker is when a critical component depends on a single source willing to walk away.