Key talks between representatives from German carmaker Volkswagen and trade union officials kicked off on Monday aimed at resolving a collective bargaining dispute before Christmas.
The two-day talks in the northern city of Hanover began at 11 am (1000 GMT), with management at Europe’s largest carmaker demanding 10% across-the-board pay cuts for VW’s German workforce, and threatening to close factories in Germany and slash tens of thousands of jobs.
Some 100 VW employees were rallying outside the hotel where the talks are taking place to protest against the carmaker’s massive cost-saving plans.
Protesters were carrying placards with slogans including “Work for all our sites,” and “We’re fighting for our collective wage agreements.”
VW executives say that high labour costs in Germany are contributing to disappointing financial results, exacerbated by stiff competition in China and struggles with shifting to electric vehicles.
IG Metall, the trade union representing most Volkswagen workers, has flatly rejected management’s demands and vowed to wage a bitter fight against the cuts unless VW agrees to compromise.
The union has called for all sites as well as all roughly 130,000 VW workers to be kept, rejecting permanent pay cuts.
In an attempt to ratchet up the pressure on executives, employees have already held two rounds of strikes in December, with the threat of further action to come.
The latest talks – the fifth round of negotiations in total – are held in a hotel in Hanover, instead of at the company’s headquarters in Wolfsburg.
While both sides have expressed hope that an agreement can be reached before the Christmas holidays, when most of Germany traditionally grinds to a halt, there is much ground to cover.
“We now finally expect [management] to work constructively with us on this path and to achieve good solutions before Christmas,” said IG Metall negotiator Thorsten Gröger on the sidelines of the small rally on the footpath in front of the hotel.
“We don’t want to go on Christmas holiday with this uncertainty, with the fear of whether there will be redundancies, whether there will be site closures,” said Volkswagen works council leader Daniela Cavallo.
VW chief negotiator Arne Meiswinkel also stressed that “we cannot afford to lose any more time.”
“There is an urgent need for action,” he said at the start of the talks.
“The goal now is to find a solution together. This is our shared responsibility,” Meiswinkel added.
To secure the company’s future, both sides had to “identify further financial potential that will lead to sustainable cost savings.”
With the two sides still far apart, discussions are expected to continue until late on Tuesday.
Following the fourth round of negotiations held last week, for the first time both sides said talks had been constructive, without signalling real progress however.
