Volkswagen executives, union deal likely at Christmas as workers battle management over planned restructuring

By Frank Johannsen, dpa I Tuesday, November 25, 2024

SAXONY – Chief Executives at German carmaker Volkswagen, who have warned of potential plant closures and mass lay-offs amid financial struggles are hoping to reach a deal with the IG Metall trade union by Christmas.

“I think there is a great desire on both sides not to have these discussions under the Christmas tree for all employees,” Dirk Grosse-Loheide, head of procurement for VW, said on Tuesday at an automotive industry conference hosted by the German financial newspaper Handelsblatt.

IG Metall trade union leaders and the VW Works Council have vowed to wage a bitter struggle against any closures or major job cuts at the carmaker.

VW executives, however, have said that significant cuts to labour costs are necessary to keep the brand competitive, and that VW currently is suffering from excess production capacity at its German factories.

No deal has so far been reached in collective bargaining talks with the union, which has threatened to begin strikes at VW’s plants in Germany beginning in December.

The next round of talks are scheduled for December 9.

Grosse-Loheide said on Tuesday that he is very confident that the company “can find a common and strong path to real competitiveness,” and that VW has always emerged from past crises as a stronger company.

At the same time, he reiterated the need to reduce costs sustainably. He said that VW lacks orders for an excess of more than 500,000 vehicles that could be produced at its plants each each.

“If the demand is not there, we have to restructure our capacities and adapt them to demand. I think that is unavoidable,” the executive said.
With an adjusted capacity, VW could then operate a highly profitable business, according Grosse-Loheide.

“That’s why I believe in the future,” said Grosse-Loheide. “But we have to carry out the restructuring now.”