Audi sticks by Ukraine suppliers as they struggle to keep producing in amid war

Russia's invasion of Ukraine has had wide-ranging ramifications for almost all of Volkswagen Group's brands and stirred strong reactions among its leadership.

Audi executives said last week that they were scrambling to replace vital wire harness production that has been slowed — but amazingly, not stopped — from Ukraine as the war rages there.

"Many of our suppliers, especially for wiring harnesses, were in Ukraine, or are in Ukraine. They are desperately — even with the people staying there, which is incredible — trying to produce and doing so always close to a bomb shelter," Audi AG CEO Markus Duesmann said.

"They try to produce, which is an enormous achievement [for] a really proud and brave people there."

He said VW Group has tried to adjust by boosting production of wire harnesses in Romania, Hungary, Tunisia and Morocco, as well as in Mexico and China, "to compensate for the volume losses we do have in Ukraine. We think within the next few weeks, we will be up to full volume, and then the situation might ease, I think, in the second half of this year, depending on how the war develops."

Hildegard Wortmann, head of sales for Audi, said later in the week that Audi's management board has chosen to continue to source parts and goods from Ukraine for as long as possible, even as it gets more difficult.

She said the company is doing so "to show a strong commitment to Ukraine and saying we stay with them and we don't desert them and leave them behind."

VW Group has about 7,000 employees in Ukraine and Russia, and it has shut down its plants in Russia.

"What we have decided as a board team is that we are not going to pull away the production from Ukraine because that would not be fair to the people in the Ukraine. We'll leave as much as it as possible in the circumstance because [Audi's suppliers there are] mostly in western Ukraine and not eastern, where the majority of the war is taking place," Wortmann said. "As long as they are able to produce something, we will not pull away any orders, we will not pull away the machinery or the production lines or anything; that will stay in the country."