STORY: Trade unions and Volkswagen company executives kick off landmark pay talks Wednesday (September 25).
It’s likely to decide how aggressively Europe’s biggest automaker pursues layoffs and possible factory closures in Germany.
Tensions are running high as VW has threatened to close plants in the country for the first time.
That has put it at odds with the key IG Metall union which has vowed to fight any such moves.
The union must also negotiate new labor deals for the core VW brand’s 130,000 workers in Germany.
Earlier this month, the automaker ended agreements that had safeguarded employment at six of its plants there since the mid-1990s.
VW argues high energy and labor costs in Germany make it harder to compete with European peers.
It has also warned Chinese rivals want to grab a big chunk of the region’s electric vehicle market.
The VW brand’s personnel chief said the division must cut costs to stay competitive.
He called the firm’s situation ‘serious’, and said labor and management must work together on restructuring.
Other German automakers feel the pain too.
BMW and Mercedes-Benz both cut their profit forecasts in recent weeks due to weak demand in China.
Source Agencies
