Volkswagen workers in Germany are preparing to go on strike in early December, with the union IG Metall describing it as “necessary.” The move follows the collapse of negotiations between the company and workers over severe cost-cutting measures.
“Accordingly, strikes are possible and also necessary from the beginning of December,” said IG Metall in a pamphlet circulated to workers. “Volkswagen will determine at the negotiating table how long and how hard the conflict will be—the VW workforce throughout the country is ready to strike,” the union added, according to RTE News.
Volkswagen, facing rising competition from Chinese automakers, weakening demand for electric vehicles (EVs), and a sluggish German economy, announced plans in October to shut down at least three production plants and cut tens of thousands of jobs. The company also required the remaining workers to accept a 10% pay cut.
The announcement came shortly after Volkswagen issued its second profit warning in less than three months and stated it would outsource entire divisions and various tasks to external service providers. The production facilities that will stay operational are set to be downsized.
Arne Meiswinkel, chief negotiator for Volkswagen AG, expressed concern in an October press release: “We are very concerned about the current trend in the auto industry in Europe, and especially in Germany as a business location. The deterioration in Volkswagen’s figures for the last quarter underline, particularly for the Volkswagen brand with a margin of only 2.1 percent, makes this particularly clear. If we remain at this level, we will be unable to finance our future. Successful operations are a prerequisite for job security. And that is our goal. So one of the things we need to do is reduce our labour costs.”
In response to the proposed cuts, the workers’ council has suggested that management could reduce their bonuses as an alternative to slashing employee compensation.
