VW Faces Strikes Over Plant Closures As Profits Sink

Workers at Volkswagen have threatened strikes unless management backed down from planned factory closures in Germany, further complicating matters as profits at Europe’s largest carmaker plunged to a three-year low, Christina Amann and Andrey Sychev reported for Reuters.

IG Metall claims that VW plans to shut down three plants in Germany for the first time in the company's 87-year history, along with mass layoffs and 10% pay cuts for those who remain employed. I Photo: IG Metall Salzgitter-Peine 

Volkswagen released its third-quarter results on the same day as a second round of increasingly bitter talks between VW and unions over wages and the company’s future. High costs and weak demand in China have dragged down sales.

These issues have fueled wider concerns about Germany's status as an industrial powerhouse and the competitiveness of European carmakers against global rivals.

German automakers also fear the impact of a standoff between the European Union and Beijing, as new EU tariffs of up to 45.3% on Chinese electric vehicles come into effect this week.

For Volkswagen, the Q3 results underscored the need for significant changes to maintain competitiveness. However, worker representatives accuse management of making poor decisions and undermining a long-held tradition of consensus-driven decision-making.

While unions are demanding a 7% pay rise, they claim VW is planning to shut down three plants in Germany for the first time in the company's 87-year history, along with mass layoffs and 10% pay cuts for those who remain employed.

"Volkswagen has opened Pandora's box by terminating job security and other collective agreements, jeopardizing the trust of its employees. It is now up to Volkswagen to restore this trust," IG Metall union negotiator Thorsten Groeger said.