VW says talks to end supplier dispute will resume on Monday

August 20, 2016 6:24 AM EDT

A VW sign is seen outside a Volkswagen dealership in London, Britain November 5, 2015. REUTERS/Suzanne Plunkett/File photo

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FRANKFURT (Reuters) - Volkswagen is seeking a negotiated settlement with suppliers in a dispute over contracts that is halting production at some of its plants and talks will resume on Monday, the German carmaker said.

"Naturally, we remain in talks with the suppliers," a VW spokesman said, adding that the negotiations had run late into the night on Friday and that the parties had agreed to resume discussions on Monday.

He said the company was keeping its legal options open, without giving further details.

Two Volkswagen suppliers accused the carmaker on Friday of cancelling contracts without explanation or offering compensation, prompting them to stop deliveries.

CarTrim, which makes seats, and ES Automobilguss, which makes cast iron parts needed to make gearboxes, are seeking compensation after saying they faced lost revenues running into tens of millions of euros.

German newspaper Sueddeutsche Zeitung said the suppliers were seeking 58 million euros ($66 million) from VW, without citing a source for the information.

A source close to Volkswagen told Reuters on Thursday the company would cut working hours for more than 10,000 staff at its Wolfsburg headquarters and reduce output at two more German sites.

Separately, the carmaker confirmed a report in Bild newspaper on Saturday that the Wolfsburg plant would halt production of the Golf model from Oct. 4-7 and from Dec. 19-22.

VW said the stoppages were part of regular production adjustments planned for the following quarter and were due to output being higher than expected thanks to workers keeping up production during the summer shutdown in July.

It denied, however, that the company expected to produce 15,000 fewer Golfs this year than planned at the beginning of the year.

($1 = 0.8829 euros)

(Reporting by Jonathan Gould and Andreas Cremer; Editing by Helen Popper)

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