Volkswagen German workers continue ‘warning’ strike after defeat

The union’s chief negotiator warned that if they couldn’t reach a deal, “it would be the most acrimonious wage dispute ever at Volkswagen”

Volkswagen workers across Germany have decided to go on warning strike starting Monday, December 2, as tensions rise between unions and the German automaker, which plans to close factories, cut wages and initiate mass layoffs.

These warning strikes usually last several hours and come after the IG Metall union was unable to reach an agreement with VW on cost cuts. In late November, the union proposed cost savings of 1.5 billion euros ($1.6 billion), including forgoing bonuses for 2025 and 2026. The union has also proposed using money from wage increases to set up a fund to finance temporary reductions in working hours in some departments. Enterprises are facing the problem of overcapacity.

Read: Volkswagen abandons decades of job protections in Germany, prepares for job cuts in 2025

“The group’s financial situation is not yet in crisis as it was in the 1970s and 1990s,” said Thorsten Groeger, the union’s chief negotiator. “We can see room for action and investment to right the costly mistakes of the past.” He also warned that if they couldn’t reach a deal, “this would be the most acrimonious wage dispute Volkswagen has ever seen.”

In response to the union’s proposal, Volkswagen said, “While there may be a positive impact in the short term, these measures will not bring any sustainable financial relief to the company in the coming years.” A Volkswagen source told Reuters The reporter added in an interview that these measures will only buy time for the company, but the company does not have time.

Volkswagen is seeking a 10% wage cut across the board, believing it will allow it to slash costs and boost profitability, helping it better compete with cheaper competition from China. The German factory is also likely to close for the first time in Volkswagen’s history.

Falling demand in Europe and China, poor management decisions and high costs are among the factors contributing to Volkswagen’s troubles. The company does not expect pre-pandemic demand to return, meaning there is currently overcapacity.

Representatives from IG Metall and Volkswagen are scheduled to meet on December 9 for the next round of negotiations. If no agreement is reached, the union may launch a 24-hour strike, or the union may decide to trigger a longer “unrestricted strike”.