Thousands of Volkswagen employees staged a four-hour strike across nine German plants on Monday, intensifying a standoff between the automaker and unions over proposed pay cuts and plant closures. The walkout coincided with the start of a new round of negotiations aimed at resolving the escalating conflict.
At the heart of the dispute is Volkswagen’s plan to implement €10 billion in savings amid declining demand in Europe and stiff competition in China. The company is considering drastic measures, including slashing thousands of jobs, cutting pay by 10%, and potentially closing factories in Germany.
In an email to Euronews Business, Volkswagen stated, “Volkswagen AG still needs a cost reduction that can be implemented in the short term and has a lasting effect. This is the only way we can remain competitive in economically challenging times.” The automaker emphasized the need to reduce excess capacity and high labor costs to secure its long-term competitiveness.
Union Resistance and Counter-Proposals
Unions have rejected Volkswagen’s plans, proposing an alternative package they claim would save the company €1.5 billion. Their proposal includes reduced dividend payouts and selective bonus cuts. However, Volkswagen’s chief negotiator, Arne Meiswinkel, dismissed the plan, stating, “After intensive analysis, this counter-proposal is not sufficient for a sustainable solution.”
Union leaders argue that cost reductions should be distributed more equitably across management, shareholders, and workers. Daniela Cavallo, chief employee representative, voiced the unions’ frustration during a recent rally in Wolfsburg attended by nearly 100,000 workers. “We demand that all make their contribution – management and the shareholder side as well,” she said, warning that unions are prepared for further strikes in 2025 if no agreement is reached.
Government Intervention and Looming Decisions
German Chancellor Olaf Scholz has urged Volkswagen to reconsider its plans to close factories. Speaking to the Funke media group, Scholz emphasized the importance of negotiations between the company and employee representatives but cautioned against plant shutdowns.
With tensions running high, Monday’s negotiations are seen as pivotal. Cavallo described the upcoming discussions as a moment to “set the course – rapprochement or escalation.” Volkswagen’s negotiators, meanwhile, are seeking “further potential” for savings to sustain investments in future product lines through the 2030s.
Monday’s strike underscored the stakes, with thousands of workers protesting at Volkswagen’s Wolfsburg headquarters and other sites. Both sides are under pressure to find a resolution that balances economic sustainability with employee welfare, as the threat of prolonged industrial action looms over Germany’s largest automaker.
