At the Portuguese factory of the German car manufacturer Volkswagen, they plan to stop production for several weeks due to a lack of components. The cause is the floods in Slovenia, which severely affected the Slovenian supplier, the management wrote in an internal message to approximately 5,000 employees. It is the company KLS Ljubno, which is a supplier to Volkswagen.
Chief Director of KLS Ljubno Mirko Strašek said he did not know why Volkswagen’s Portuguese subsidiary had halted production and predicted that more production lines in the European auto industry would be halted this week and in the coming weeks.
KLS Ljubno is a large supplier of toothed rings, and its products supply more than 80 percent of the automotive market in Europe, said Strašek.
A few more months until the start of production
The CEO also emphasized that they are trying to restore production as soon as possible after the water damage, but they need a few more months to do so. Strašek hopes that part of the production could be established in October, but they will still not be able to supply all customers with their products.
“We are still cleaning the factory and it won’t be over soon. First we had to clean the mud and debris brought by the flood. Now it’s time for a more thorough cleaning. We are focused on the machines and technological equipment, which we are gradually trying to bring to life , but since it’s all electronics and digitized manufacturing, these sensitive instruments and electronic devices will have to be replaced with new ones,” says the Scarecrow.
Damage of more than 100 million, the insurance company will reimburse 2 percent
As he added, without state aid, they will not be able to repair the damage of more than 100 million euros after the water damage by themselves, and they will receive barely two percent of the compensation from the insurance company.
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The suspension of production in the Portuguese factory is planned for the first half of September and will last for several weeks, reported the German press agency dpa, which obtained an internal message to the employees of the factory. According to these indications, the Volkswagen Group “is working with other suppliers to find alternatives so that the affected plants can return to normal production as soon as possible”. In addition, Volkswagen is supporting a supplier in Slovenia so that it can re-establish production.
Volkswagen’s subsidiary Autoeuropa, located in the city of Palmela near Lisbon, is, according to the German concern, one of the largest foreign industrial investments in Portugal. In 2021, Autoeuropa represented 1.5 percent of Portugal’s gross domestic product and four percent of Portuguese exports. In Palmela, Volkswagen has been producing T-Roc models since 2017.
