VW labor boss suggests taking stakes in suppliers: DPA

August 26, 2016 6:34 AM EDT

The logo of a Volkswagen Beetle car is seen at the so called "Sunshinetour 2016" in Travemuende at the Baltic Sea, August 20, 2016. REUTERS/Fabian Bimmer

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BERLIN (Reuters) - Volkswagen should consider taking stakes in key suppliers to shield itself from disruptions after two of its parts makers brought car production in Germany to a standstill by refusing to deliver components, Deutsche Presse Agentur (DPA) reported on Friday, citing the VW's labor boss.

"Because of what we experienced in the past days, we may now possibly need an additional alert system to further reduce those risks for Volkswagen," VW works council chief Bernd Osterloh was quoted as saying in an interview published on Friday.

"A conceivable approach are minority stakes or options to buy."

Europe's largest carmaker and the two suppliers on Tuesday resolved a dispute affecting 28,000 workers at six of VW's 10 German factories.

A day earlier VW was forced to halt production of its top-selling Golf and Passat models as well as assembly of engines, gearboxes and emissions systems. [nL8N1B404N]

Osterloh, a member of VW's supervisory board, referred to Japanese rival Toyota <7203.T> for possible lessons on how an investment in parts makers can help a carmaker to better control its supply chain.

"Toyota has holdings in many of its suppliers," he said. "I am not saying that VW should now seek stakes in all of its suppliers. But with regard to vulnerable parts (of the business), this might be a possibility."

VW declined to comment.

VW suppliers Car Trim and ES Automobilguss last week stopped deliveries of seat covers and cast iron parts for gearboxes, triggering stoppages after VW had canceled a contract without notice and refused to pay 58 million euros of compensation, sources said.

VW expects production of its Golf and Passat models in Germany to be back to normal by Monday following a compromise which will see the suppliers, both part of Bosnia's Prevent group, work with VW for at least another six years. [nL8N1B53XL]

(Reporting by Andreas Cremer; editing by Jason Neely)

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