Volkswagen is facing demands from the IG Metall trade union and workers’ council to strike a deal with workers before Christmas. The company has threatened mass layoffs and plant closures if no agreement is reached, but the union and workers’ council have proposed saving €1.5 billion in labor costs through pay cuts.
Background
Volkswagen has been struggling with high labor costs and difficulties breaking into the competitive electric vehicle market. The company has committed to a $5.8 billion investment to boost its transition to electric vehicles in cooperation with US firm Rivian.
Demands for a Deal
The IG Metall trade union and VW’s workers’ council are demanding that Volkswagen strike a deal with workers before Christmas. This comes as the company threatens plant closures and layoffs in an effort to reduce labor costs.
Threat of Mass Layoffs and Plant Closures
Volkswagen has threatened mass layoffs and plant closures if no agreement is reached, but the union and workers’ council have offered to take pay cuts to avoid these measures. They propose saving €1.5 billion ($1.58 billion) in labor costs through these measures.
Previous Negotiations
Previous negotiations between Volkswagen and the IG Metall trade union have been unsuccessful, with the company demanding an across-the-board pay cut of 10% for workers in Germany. The union and workers’ council have rejected this proposal.
Next Steps
A mandated moratorium on industrial action during initial talks is due to expire at the end of November, meaning that warning strikes are possible starting from December 1 if no deal is struck. The decision on whether to call a strike will depend on the results of Thursday’s talks between Volkswagen and the IG Metall trade union.
Quotes
IG Metall’s chief negotiator, Thorsten Gröger, urged VW to take a “constructive” role in the talks, saying: “We expect Volkswagen to embark on this constructive solution path with us today and to enter into a negotiation process now.”
The chairwoman of the company’s workers’ council, Daniela Cavallo, described the threat of mass layoffs and plant closures as “maximum provocation” and called for the firm to put forward constructive proposals to solve its crisis.
