Volkswagen workers conducted rolling two-hour strikes at nine German plants on Monday to express their opposition to proposed pay cuts and factory closures, which the company claims are necessary to adapt to a sluggish European auto market, reports AP.
The strikes included the main plant in Wolfsburg, where workers protested against management’s cost-cutting measures, which could lead to the company’s first plant closures in Germany, AP reported.
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Volkswagen maintains that it must reduce costs in Germany to match the levels achieved by its competitors and its plants in eastern Europe and South America. Chief employee representative Daniela Cavallo stated that workers should not be the ones to bear the consequences of management's failure to create appealing products and a more affordable, entry-level electric vehicle, as reported by AP.
“Everyone needs to contribute – both management and shareholders,” Cavallo said at the Wolfsburg rally, where employees drummed, whistled, and clapped, according to AP.
She noted that the next round of talks, scheduled for a week from now, “could determine whether we move towards reconciliation or escalation. We are prepared for either outcome,” AP quoted her as saying.
The so-called warning strikes, a common approach in German wage negotiations, are part of discussions for a new labour agreement following the end of a mandatory peace period that barred strikes as of Sunday, AP stated. The IG Metall industrial union indicated that any further job actions would be announced later.
Volkswagen is pushing for a 10% pay cut for its 120,000 German workers and has stated it cannot avoid reducing factory capacity that is no longer needed. Employee representatives mentioned that the company has proposed closing three German plants, AP reported.
Thorsten Gröger, regional leader of the IG Metall union in Lower Saxony, where Volkswagen is headquartered, stated that the company would not be able to ignore the strikes. “If needed, this could become one of the most challenging conflicts Volkswagen has ever faced,” according to AP.
Although the company has not publicly disclosed its plans, it is dealing with reduced demand in Europe, rising costs, and growing competition from Chinese automakers. Volkswagen built its factories to serve a European market with 16 million annual vehicle sales but is now facing demand of approximately 14 million units. With a quarter of the market share, this equates to a loss of 500,000 cars annually, according to Volkswagen brand head Thomas Schaefer, as reported in the Welt am Sonntag newspaper and cited by AP. Schaefer noted that strong profits from China had previously offset higher costs, but the shifting conditions now require immediate action, AP reported.
The walkouts started at the Zwickau plant in eastern Germany and were set to continue at plants in Braunschweig, Chemnitz, Dresden, Emden, Hanover, Kassel, and Salzgitter, according to AP.
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The next round of negotiations is scheduled for December 9, AP added.