Union leaders are fighting to keep factories runningwhich the management intends to close. On the negotiating table trade unionists put in 1.5 billion euros in additional cost cutsincluding waiving some bonuses.
However, the positions of both sides are still divergent. VW’s management is demanding much greater cost cuts, which it says are necessary to reduce excess production capacity.
Different positions of the management board and unions
On Wednesday, employee representatives said that VW management plans 17 billion euros across the board in cuts, of which labor is a small part. The company is considering measures much more radical than those unions are willing to agree to, including closing or selling several factories in Germany.
Trade unionists proposed reducing dividend payments, reducing part of the management staff, as well as bonuses for employees next year and in 2026, and paying planned salary increases to the fund to cover possible layoffs and reductions in shifts.
Two plants will be closed, the third will limit production
The car manufacturer said it was examining trade unionists’ proposals, adding that it could not rule out closing the plants for now. Volkswagen executives said the decline in sales in Europe left the automaker with about two too many car plants.
Bloomberg learned from people familiar with the matter that the management proposed the sale of two car factories in Osnabrück and Dresdenwhile the third one the plant in Emden can be used for contract production.
Three German Volkswagen factories at risk of closure / Bloomberg
The talks will continue on Thursday. If there is no agreement, then Warning strikes are to begin in December.
A labor dispute unlike any other for decades
If VW refuses to compromise, it must prepare for “a labor dispute over locations the likes of which this country has not seen in decades.”“, said Thorsten Gröger, chief negotiator of the workers’ side, at a press conference in Wolfsburg on Wednesday.
Volkswagen’s corporate structure, which gives employees a strong voice in key decisions, makes it difficult to implement cost cuts. Employee representatives occupy half of the seats on the company’s supervisory board, while VW’s home state, Lower Saxony – where Osnabrück and Emden are located – has an additional two places.
