VW’s German Production Grinding to Halt Over Spat With Supplier

VW stopped Passat production on Thursday and will halt assembly of its best-selling Golf on Monday if the conflict isn’t resolved, said people familiar with the matter, who asked not to be identified. VW has officially said the two factories producing those models face slowdowns, as do two plants that build chassis, the basic underpinnings of vehicles. A VW spokesman wasn’t immediately available to comment.

The dispute threatens to reduce earnings by up to 40 million euros ($45 million) a week -- according to Christian Ludwig, an analyst at Bankhaus Lampe -- at a time when VW is trying to boost sagging profit at its namesake brand by lowering annual spending by 1 billion euros. Two Prevent Group-owned suppliers providing transmission and seat parts have halted deliveries in a dispute about future development and supply projects.