HANOVER, Germany (Reuters) – Germany’s IG Metall union has accused Volkswagen of delaying critical decisions towards an agreement over pay and job security, stating that both sides disagree on key areas and that talks could still collapse.
The assessment came after over 60 hours of talks aimed at avoiding strikes in negotiations that include jobs and the future of the carmaker’s German plants. The union said that while some progress has been made, negotiations have not been aborted, but they now expect the company to provide clarity as quickly as possible.
The talks, which have been ongoing since Monday, are focused on cost-cutting measures at Volkswagen and have been going on late into the night. The union has warned that large-scale industrial action could begin early next year if an agreement is not reached.
Around 100,000 workers have already staged two separate strikes in the past month, protesting against management plans to cut wages, reduce capacity and potentially shut German plants for the first time. The future of VW’s Osnabrueck and Dresden plants looks uncertain, with the union stating that the company’s plans to cut jobs and close plants could lead to a longer interruption or termination of the negotiations.
The crisis at Volkswagen has hit at a time of uncertainty and political upheaval in Europe’s largest economy, with Germany’s sluggish growth taking centre stage as a campaign issue ahead of a snap election in February. The company’s structure, which requires a two-thirds majority in the 20-strong supervisory board for any decision to build or move a production plant, has made it difficult to reach an agreement.
Workers strongly oppose plant closures, but Volkswagen has said that the move may be necessary to find around 4 billion euros in required cost cuts and respond to what it expects is structurally weaker demand in Europe. Scenarios under discussion include capacity cuts rather than full plant shutdowns, with one possibility being the shifting of production of the Golf model to Mexico from VW’s main plant in Wolfsburg.
Volkswagen is also grappling with nimble and cheaper Chinese competitors as well as a slower-than-expected adoption of electric vehicles.
