VW ‘Warning Strikes’ Coming In December As Union Relations Sour

Volkswagen wants to slash wages 10% and eliminate bonuses as they’re struggling with an assortment of headwinds. However, the automaker has previously said the union wants a 7% pay increase as well as the reinstatement of terminated agreements.

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Those are two polar opposites so it comes as little surprise that the third round of collective bargaining negotiations between Volkswagen and the IG Metall union failed to result in a breakthrough. While the union is willing to discuss concessions that would reduce labor costs by €1.5 ($1.6 / £1.2) billion, there are some lines in the sand they won’t cross.

More: VW Wants To Eliminate Bonuses And Cut Wages By 10%

In particular, the union said Volkswagen’s board “still does not want to rule out site closures and mass layoffs.” IG Metall added the automaker is pushing for a 10% wage cut, a pay freeze, and the cancellation of a €167 ($174 / £139) monthly allowance. On top of that, company officials also reportedly want a “massive reduction in training capacity” as well as the elimination of anniversary bonuses for long-term employees.

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The union was less than pleased with the proposal, so their collective bargaining committee voted unanimously for “warning strikes” starting in early December. IG Metall’s Thorsten Gröger said, “A labor dispute is looming, the intensity of which the country may not have seen for a long time.” He added the “workforce at all locations is prepared for conflict” and it’s up to Volkswagen to determine how bad things will get.

IG Metall

It remains unclear how punishing these strikes could be, but the union complained about Volkswagen’s “poison list” that includes plant closures, mass layoffs, and wage cuts. Instead, the union is pushing for a wage increase that would be “temporarily paid into a solidarity fund” which would help to make staff cuts “socially acceptable,” if needed. However, the real goal is to keep people employed by reducing working hours.

While the situation is complex, the union made one thing clear: this isn’t an idle threat. As they explained, “There will be no solution for Volkswagen employees before the end of the peace obligation on November 30th.” This means strikes are coming as the next round of collective bargaining isn’t scheduled until December 9th.

The union will use this roughly one week span to “apply pressure” with warning strikes. If Volkswagen doesn’t respond in a way the union likes, Gröger said “It will be a labor dispute the likes of which the Federal Republic has not seen for decades.”

For their part, Volkswagen said IG Metall signaled its openness to a reduction in labor costs and capacities. They also confirmed receipt of the union’s counter-proposal, which they said would be “judged on whether it creates both sustainable financial relief for the company and offers clear prospects for the workforce.” However, Volkswagen said they’re focused on discussing their own plan.

This puts the two sides on a collision course and it could be a bumpy road ahead as the collective bargaining agreement covers approximately 120,000 employees at plants in Wolfsburg, Braunschweig, Hanover, Salzgitter, Emden and Kassel. There are also employees at Volkswagen Financial Services, Volkswagen Immobilien GmbH, and dx.one GmbH.

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