By Volkswagen (ETR:VOWG_p) and labor representatives have re-engaged in discussions this Monday with the aim of resolving ongoing disputes regarding cost reduction strategies for the automaker’s operations in Germany.
The negotiations, which have been challenging, focus on how the company can adjust its financial strategy in the face of decreased demand for electric vehicles, growing competition from Chinese manufacturers, and high labor costs.
Thorsten Groeger, the chief negotiator for the IG Metall union, expressed his desire to reach an agreement before Christmas. However, he acknowledged the significant distance between the parties on several critical matters.
Groeger also warned of an escalation plan by IG Metall, which may lead to unprecedented strike actions in the new year if a compromise is not reached beforehand.
Volkswagen has put forth a proposal that includes a 10% reduction in worker pay and the elimination of bonuses. The company has also emphasized the need to reduce capacity. In contrast, labor leaders are standing firm against any factory shutdowns, widespread layoffs, or cuts to salaries.
Daniela Cavallo, the head of Volkswagen’s works council, has indicated that the company plans to close a minimum of three factories in Germany and lay off tens of thousands of workers. Previous rounds of negotiations have not yielded an agreement, prompting approximately 100,000 workers from nine plants to participate in walk-outs during two recent days of strikes.
Arne Meiswinkel, Volkswagen’s chief negotiator, highlighted the urgency of the situation ahead of the fifth round of talks, stating the necessity for collaboration to uncover additional financial potential that will provide sustainable cost relief for the company.
The discussions are set to continue over the next few days, as both sides search for a viable path forward amidst the economic pressures facing the automotive industry.
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