Good day @biker6977
As harsh as the term sounds, what we're really speaking of when we say "escalation" is what IATF refers to as start of the "decertification process" as defined in rules 5th edition 8.1
The rules state...
a)....certification body receives ...complaint...
(i.e. when your customer complains about you to the certification body (CB)
b) the client (e.g. your organization) advises the CB of a special status from ....OEM....
(your organization, for example, is required to notify your CB within ten (10) calendar days from when your organization is put on special status by your customer)
So, in the example given above, VW putting them on "escalation" was obviously some type of special status. The organization had ten (10) days to notify their CB of that special status.
The IATF 16949 standard (section 3.1) defines "special status" as...
"notification of a customer-identified classification assigned to an organization where one or more customer requirements are not being satisfied due to a significant quality or delivery issue"
On a side note, I find it odd that IATF chose to put a "client" (i.e. organization such as yours) requirement in Rules 5th edition (which most organizations do not possess) and not place that requirement directly in the body of the IATF 16949 standard.
Hope this helps.