Volkswagen settles dispute that hit Golf production

Volkswagen emissions scandal: A timeline
Volkswagen emissions scandal: A timeline

Volkswagen is preparing to resume full production at its factories after resolving a serious dispute with suppliers.

A shortage of parts had caused major disruption at six of the automaker's factories in Germany and forced Volkswagen to reduce hours for about 27,700 workers.

The suppliers, owned by Prevent Group, were seeking compensation for a contract they said was canceled by Volkswagen, according to a German newspaper report.

Volkswagen (VLKAY) said it would not provide details about the settlement. Prevent Group did not immediately respond to a request for comment.

A Volkswagen spokesperson told CNNMoney that deliveries of seat fabrics, gear boxes, and other equipment would resume, allowing the company to ramp up assembly of its best selling Golf car. The spokesperson did not say when production would be back to normal.

Volkswagen's factory in its home town of Wolfsburg -- where the Golf is made -- was the worst affected by the dispute.

The Wolfsburg factory produced 815,000 cars in 2015, according to UBS analysts who estimate that a week of lost production would cost the company about 100 million euros ($113 million) in gross profit.

Volkswagen would not comment on how the production stoppage might affect its earnings, but said customers wanting to buy a car wouldn't be affected.

Related: Volkswagen profits back on track, despite scandal

Volkswagen is still trying to resolve its huge diesel emissions scandal, which the company previously said could cost it 16 billion euros.

Global sales of Volkswagen vehicles have eked out a gain of about 1% in the first five months of 2016.

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