7:53 am, December 3, 2024
Workers at Volkswagen plants in Germany have begun rolling two-hour ‘warning’ strikes at nine factories in a stand against pay cuts and factory closures.
The stoppages included the company’s base plant at Wolfsburg, where workers are due to rally against a cost-cutting drive by the carmaker’s management in which they face the threat of Volkswagen’s first factory closures in its home country.
The German carmaker says the pay cuts and plant are necessary to cope with a slack European car market.
The so-called warning strikes, a common tactic in German wage negotiations, are taking place as part of talks for a new labour agreement after a mandatory peace period that bars strikes expired on Sunday.
The IG Metall industrial union said any job actions beyond those occurring on Monday would be announced later.
The company is demanding a 10% pay cut for 120,000 German workers and has said it cannot avoid shedding factory capacity that is no longer needed.
Employees’ representatives say the company has proposed closing three of its German plants.
Thorsten Groger, the regional leader of the IG Metall industrial union in Lower Saxony, where Volkswagen is headquartered, said that the company won’t be able to ‘overlook’ the walkouts.
‘If necessary, this will be one of the toughest conflicts Volkswagen has ever seen.’
The company has not publicly detailed its plans but is facing a drop in demand in Europe, higher costs and increasing competition from Chinese carmakers.
Volkswagen built factories to supply a European car market of 16 million in annual vehicle sales, but now faces demand for around 14 million, Volkswagen brand head Thomas Schaefer was quoted as saying in the Welt am Sonntag newspaper.
Since Volkswagen has a quarter of the market, that represents a loss of 500,000 cars a year.
For years, strong profits in China helped cover higher costs but the changing environment now means that ‘it’s high time to address this’, Schaefer said.
Volkswagen argues that it must lower costs in Germany to levels achieved by competitors and by Volkswagen plants in eastern Europe and South America.
Chief employee representative Daniela Cavallo said the next round of talks in a week’s time ‘is likely to set the course – rapprochement or escalation. We are ready for both.’
The walkouts began in Zwickau in eastern Germany and were set to continue at plants in Braunschweig, Chemnitz, Dresden, Emden, Hanover, Kassel, and Salzgitter.
The next negotiations are slated for December 9.
Speaking to Die Welt am Sonntag last month, Schafer said: ‘Ultimately, any solution must reduce both overcapacity and costs. We can’t just stick a band-aid on it and keep dragging it along. That would come back to bite us later in a serious way.’
Some of the job losses would be done via natural attrition but more needs to be done.
‘It would simply take too long. There is no point in delaying restructuring until 2035. By then, our competition would have left us behind,’ he said.
Volkswagen has already tabled a 10% pay cut amid a sharp profit fall of 42% in the third quarter.
