VW worried: Because of the Ukraine war, there is a risk of “total failure”

Created: 03/26/2022, 08:14

By: Simon Mones

The war in Ukraine is hard on the manufacturers.

Volkswagen even fears a “total failure” of local production.

Wolfsburg – The war in Ukraine poses major problems for German car manufacturers.

Because: The Eastern European country is of immense importance for the supply chains.

For example, Ukraine is one of the main suppliers of neon, which could exacerbate the global chip shortage*.

Cable harnesses are also produced there.

As a result, Volkswagen had to stop production at times* and the lines of several other manufacturers also stood still*.

Probably not for the last time, because – despite intensive negotiations – an end to the war is still not in sight.

Accordingly, Volkswagen* expects the worst when it comes to production and, according to Herbert Diess (63), is preparing for a “total failure” of production in the Ukraine.

This is reported by the news portal “News38.de”.

VW worried: Because of the Ukraine war, there is a risk of “total failure”

Diess also emphasized that the bottleneck that is currently decisive for car production is the supply of wiring harnesses.

"We source cable harnesses from Ukraine, from eleven factories, nine of which are still producing at reduced capacity," explained the 63-year-old.

Because of the Ukraine war, Volkswagen expects a “total failure” of local production.

(Iconic image) © Volkswagen

However, only 30 to 40 percent of the normal production capacity would be used at the moment.

However, it is feared that this cannot be maintained for long.

"That's why we initiated the relocation of production, but this will take some time," said VW boss Diess.

VW worried: War could hit economy harder than Corona

The VW boss also explained that he did not believe in a war: "What happened in Ukraine was not on our radar!" Nevertheless, Volkswagen was "not unprepared" and had already started the relocation three weeks before the war began of production started.

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Diess also told the Financial Times that the war could have a greater impact on the European economy than the Corona crisis.

Commodity prices could rise if the war in Ukraine lasts longer.

The 63-year-old also believes that energy shortages and inflation are possible.

"That could be very risky for the European and German economy," emphasizes the VW boss.

Nevertheless, the group and its employees have collected donations* to help local people.

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