VW Slovakia threatens suppliers with extra charge for flawed parts

Wolfsburg. Volkswagen is putting its tense relationship with important suppliers to a severe new test.

Volkswagen Slovakia has started threatening its top suppliers with a charge of 5,000 euros, or about $6,000 at current exchange rates, if it discovers flawed parts during its vehicle audits.

Volkswagen Slovakia is the VW-owned foreign subsidiary that is responsible for the Bratislava and Martin factories.

Among other vehicles, the Touareg and the Audi Q7 are assembled at VW's Bratislava plant, and chassis and transmission components are produced at Martin.

In a communication obtained by Automobilwoche, two high-level managers in VW's quality assurance department announced spot checks with a "severity level of less than 1 percent."

Checks for weakness

Those checks will take aim at "chronic weak points," an insider said.

Certain defects are noticeable to the average customer, VW experts say. They are significant enough to require extensive rework.

VW is passing on the resulting costs as flat fees to avoid "increased administrative expenses," a source said.

"VW is using this rip-off to refinance its quality control brigade," said one affected supplier. "The calculation is based on an hourly rate of 14, far more than a professional auditor is paid in Slovakia."

Abrasive letter

In addition, the threatening letter from VW is "phrased all too abrasively."

Here is an excerpt: "In the spirit of mutual partnership," it is to be hoped "that you provide us with parts having the agreed-upon quality."

VW brand chief Wolfgang Bernhard recently wrested savings in the three-digit-million-euro range from 38 selected suppliers during a cost-cutting conference. VW says the initiative is part of its "ForMotion" restructuring program.

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