Volkswagen union signals strikes in December as wage talks stall

Volkswagen's union, IG Metall, said the group of strikes planned across German factories beginning December 1 got no breakthrough out of Thursday's wage negotiations. About 120,000 workers at six VW plants in Germany were covered by the union, which was demanding substantial progress in the third round of talks. But both positions are far apart, they said.

The firm has suggested a wage cut of 10 percent to cut costs and improve profits to compete with cheap competition from China and falling demand for cars in Europe. The unprecedented action would see Germany's factories remain closed for the first time since 1932, the company's parent company, Ingvar Kamprad, told The Associated Press.

Volkswagen's management did not propose new counter-proposals, according to union officials, who said the union's proposal had measures to save 1.5 billion euros (USD 1.6 billion) via reduced working hours, postponing up to 1,000 million euros worth of bonuses. The talks will continue December 9, but IG Metall warned they are ready to strike if negotiations continue deadlocked.

The strikes would be the first major action in the works since 2018 at the carmaker and the potential strikes could begin as 'warning strikes' lasting several hours, increasing to longer walkouts if tensions continue. The union has expressed willingness to accept sales of the plant to external buyers to avert job losses but it continues to fight for securing the long-term prospects for its workers and to keep factories open.

The Volkswagen labor dispute is emblematic of wider worries over Germany's industrial future, as the country fights to stay competitive and tackle its own economic challenges. Other automakers, such as Ford and Mercedes, are also grappling with tough conditions as they try to cut costs.

Volkswagen shares have come under pressure, down as much as 1.4%, amid investor concern the company can navigate these issues. Union members are pushing for shareholder contributions, including adjustments to the company’s dividend policy, to ensure a fair balance between profits and worker security.