Volkswagen plant to halt production as floods interrupt supply chain

A worker’s commission announced Thursday that Volkswagen (OTC:)(ETR:) Autoeuropa is being forced to suspend production at its factory in Portugal due to a shortage of auto parts stemming from recent floods in the country.

The commission mentioned in a statement that the company would be undergoing a shutdown from September 11 to November 12. During this period, there will be temporary staff layoffs; however, the current assessment suggests that employees’ earnings should not be negatively affected.

The German car manufacturer issued a warning Wednesday indicating that certain plants might experience production disruptions due to the floods in Slovenia causing disruptions in the supply chains.

“Efforts are being made to fully resume production at this facility. In addition, the Volkswagen Group supports the on-site clean-up work with specialist personnel,” the spokesperson said.

The commission announced its plan to hold discussions with the company on September 4-5 to deliberate upon the financial aspects of the workforce reductions.

Situated close to Lisbon, the assembly plant specializes in manufacturing the T-Roc compact crossover sports utility model and holds a significant position among the country’s leading exporters.

According to the company’s official website, Autoeuropa employed nearly 5,000 individuals in 2022, a year during which it manufactured a total of 231,100 vehicles.