From Audiworld forum.
By Michael Freitag
January 22, 2024, 11:05 a.m. • from Manager Magazine 2/2024
Automotive supplier Vitesco is obviously proud of the capabilities of its belt starter generators: Instead of the alternator, a 48-volt motor is integrated into the belt drive as a starter generator, thus saving 10 percent fuel. When the Regensburg-based company, one of the colossuses of the combustion engine world with 9.1 billion euros in sales and 38,000 employees, sold the technology to the premium brand Audi in 2018, the then parent company, Continental, fabled: Audi's luxury sedan A8 would now "sail emission-free" up to 160 km/h.
Six years later, the engine alliance has developed into a dispute community - with potentially billions in damages: for Audi, for Vitesco or even for both.
The dispute over the high error rate with the starter motors has been raging internally for several months. Vitesco supervisory board chairman Siegfried Wolf (66) angered the Audi board back in the summer. He sought the support of the Porsche family, which was quite influential in Ingolstadt, in order to resolve the matter without causing any damage to Vitesco. But the problem has now escalated. Audi has called in its lawyers.
10 percent less fuel consumption? The belt starter generator from Vitesco only works if it is not defective.
Audi has been using the parts supplied by Vitesco in six- and eight-cylinder engines since 2018; The discord began with models with these drives having more and more misfires. There is talk of a good 1,000 claims per week at Audi, sometimes a few more, sometimes less. In any case, for the USA, Audi boss Gernot Döllner (55) and his people have decided on a service campaign, it should start shortly: customers can take their cars to the workshop they trust and the belt starter generators will be replaced free of charge. This is not a recall, that's what the few people at Audi who talk about the topic emphasize.
But what sounds bearable can become very annoying. Such an exchange is expensive, even the more conservative estimates are in the direction of 1000 euros. But it's a financial hit because Audi would need so many parts for such exchange offers that there wouldn't be enough for the new cars ordered. Even an order stop for six-cylinder engines in April 2023 hurt; The affected models such as the sports variants S6 and S7 bring particularly high returns.
But the dispute becomes even more problematic because Vitesco doesn't deliver as much as Audi would like. Around 6,000 units per week have been agreed and will be delivered in good times, according to Ingolstadt. Purchasing manager Renate Vachenauer (53) and now also Dirk Große-Loheide (59), who is responsible for the Volkswagen Group, tried everything to make Vitesco boss Andreas Wolf (63) and his people merciful despite the dispute.
Noticeably tough course
Now Vitesco has apparently announced that it will significantly reduce deliveries from mid-January. There is talk of a halving, neither Audi nor Vitesco want to comment on it. In any case, as of January, Audi wants to go to court if necessary.
It's not easy to imagine that a heated argument has long since broken out over the question of guilt. The original problem has been found. Vitesco, however, assumes that Audi's building regulations are to blame. The way Audi ordered, the parts simply couldn't last indefinitely. Audi sees it differently. Vitesco is responsible.
As a rule, such disputes in the German auto industry are settled peacefully. There are crisis summits, and in case of doubt the bosses get involved. The supplier increases capacity and may receive a price increase. Or, if he is in the weaker position, he gives big discounts on the next orders.
The Vitesco people, however, are considered tough. Legal director Stephan Rölleke (55) is also taking a noticeably tough course in the Hanover public prosecutor's investigation into the role of Conti and Vitesco in the diesel scandal. It seems to insiders that real power would only develop if Audi released Vitesco from liability.
The sums involved are now running dangerously high. If Vitesco actually reduces massively, Audi would not be able to utilize its plants to full capacity; Neckarsulm in particular would run at low speed. Tens of thousands of the most lucrative models might not be built. Added to this are the exchange costs, which continue to rise. Ingolstadt has cited around four billion euros as possible damage and lost profits for 2024 if Vitesco actually reduces significantly, according to the company headquarters in Wolfsburg.
This is an extreme scenario, they say in Ingolstadt. Even half would be a lot; we would try to convince customers of other engines. But the question remains as to who pays for it all. Vitesco does not wish to comment on possible provisions. At the end of the third quarter of 2023, the group reduced the short-term and long-term provisions for other risks and obligations compared to the end of 2022 to a good 540 million euros. And this also includes guarantee and liability risks.
Two supporting actors are likely to be paying close attention to what is going on in Ingolstadt and Regensburg: Georg Schaeffler (59) and Klaus Rosenfeld (57), main owner and CEO of the supplier Schaeffler. They want to take over Vitesco completely and will probably spend almost two billion euros to increase their share. It would be unthinkable if a mega-damage were to occur.
Reply With Quote
Originally Posted by Group_B
Bookmarks