With strike action imminent, Volkswagen begins its third round of wage negotiations

Volkswagen's management and worker representatives are set to hold a third round of wage negotiations on Thursday, with just ten days remaining to reach an agreement before unions escalate their campaign with strikes across the company's German sites.

The discussions concern wage agreements for 120,000 of Volkswagen's approximately 300,000 employees in Germany. These workers are employed across six plants that operate under a distinct collective wage agreement separate from the rest of the workforce.

Volkswagen has proposed a 10% wage reduction, citing an urgent need to cut costs and enhance profitability to remain competitive. The automaker is facing growing competition from Chinese companies and declining car demand in Europe, making cost-cutting measures critical to defend its market share.

In response, unions on Wednesday suggested a compromise, offering to forego bonuses for two years and establish a fund to support temporary reductions in working hours in less productive areas. The unions estimate that this approach would save €1.5 billion ($1.58 billion) while avoiding job cuts.

Under the proposal, the fund would be financed through a 5.5% wage increase contributed by workers as a show of solidarity with colleagues in overcapacity areas whose jobs are at risk. However, the unions have made the proposal conditional on management committing to no plant closures—a condition Volkswagen has so far refused to accept.

If the management dismisses their offer, unions plan to demand a 7% pay increase and guarantees against plant closures. Should these demands remain unmet, large-scale strikes are set to begin on December 1 across German sites. The last significant strike action at Volkswagen occurred in 2018, when over 50,000 workers protested for better pay.

Volkswagen board member Gunnar Kilian expressed cautious optimism, stating, "We welcome the openness of worker representatives to address labor costs and overcapacity. We will closely evaluate the financial implications of these suggestions in the negotiations."

 

 

 

 

 

 

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.