Volkswagen Labor Leaders Outline $1.6 Billion Cost-Cutting Plan, Warn of Potential Strike

Dow Jones2024-11-20

By Helena Smolak

Volkswagen Group's works council and industry union IG Metall proposed personnel cost cuts of 1.5 billion euros ($1.6 billion) under an alternative strategy for the company, threatening to go on strike if talks fail.

The labor representatives' proposal to the German carmaker comes a day before the third round of talks between employees and management on plans for an overhaul of the group, which is contending with tepid sales, high costs and fierce competition from Chinese rivals.

Both Volkswagen's works council and the union outlined at a press conference on Wednesday proposals to lower labor costs including the suspension of bonus payments but rejected potential plant closures in Germany that the company said it is considering.

Plant closures would result in strikes that could reach a scale not seen for a decade in Germany, IG Metall's district manager for Lower Saxony Thorsten Groeger said.

The proposals include wage increases to be temporarily paid into a so-called solidarity fund for the future to avoid an actual salary increase and would additionally serve as a tool to reduce working hours, the labor representatives said.

Write to Helena Smolak at helena.smolak@wsj.com

(END) Dow Jones Newswires

November 20, 2024 06:00 ET (11:00 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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