Accompanied by new warning strikes, VW and IG Metall will meet in Wolfsburg on Monday for their fourth round of collective bargaining. There were no signs of an agreement in the dispute over wage cuts, plant closures and redundancies. The union now wants to increase the pressure once again with a second nationwide warning strike directly on the day of negotiations: In nine of the ten German VW plants, the assembly lines are to come to a temporary standstill.
VW plans tough cuts
In the collective bargaining round, the first issue is the pay of around 120,000 employees at the Volkswagen AG plants, where a separate in-house wage agreement applies. In addition, there are more than 10,000 employees at VW Saxony, for whom an alignment with the company pay scale was agreed in 2021. VW rejects any increase and is demanding a ten percent pay cut due to the Group's difficult situation.
What makes the negotiations complicated is that there is also a parallel dispute over job security, which VW has terminated after more than 30 years. Plant closures and compulsory redundancies are on the table. In addition, VW wants to take on fewer trainees and reduce the pay of temporary workers, who previously received a supplement at VW, to the normal level of temporary work.
According to the works council, at least three plants and tens of thousands of jobs are under threat. VW justifies the cuts with high costs and low capacity utilization. "The VW Group is a restructuring case," said CEO Oliver Blume at the works meeting last Wednesday, according to participants. The "Business Insider" had previously reported.
IG Metall concept not enough for VW
VW rejected a counter-concept from IG Metall and the works council for savings without mass redundancies and plant closures as insufficient. IG Metall had offered not to pay out a possible wage increase for the time being, but to pay it into a future fund. They held out the prospect of a cost reduction of 1.5 billion euros for the Group.
In return, VW would refrain from plant closures and compulsory redundancies. However, the prerequisite would be the adoption of the latest pilot agreement for the metal and electrical industry, which provides for a 5.1 percent increase in two stages. And management and shareholders would also have to make their contribution and forego bonuses and dividends, demanded works council chairwoman Daniela Cavallo.
Blume described the proposals at the works meeting as a "starting point", but not nearly enough.
Further escalation threatens
Cavallo, who is at the negotiating table on behalf of IG Metall, now expects Monday's collective bargaining round to set the course: "Either we get our act together and start seriously tackling compromises. On both sides," she said on Wednesday. "Or the Executive Board insists on its position and it escalates." She once again ruled out plant closures, mass redundancies and cuts in monthly pay. This is still out of the question for the employee side.
The IG Metall is already tightening the thumbscrews further with the warning strike on the day of negotiations: In contrast to the first strike last Monday, work is to be suspended for four hours on each shift instead of just two. Once again, nine of the ten German VW plants are affected, i.e. all sites except Osnabrück. The VW plant there is not covered by the VW in-house wage agreement that is currently being negotiated.
Only minor impact of the strike so far
VW spoke of only minor production losses after the first warning strike. "The impact has been limited," said a spokesperson. Production was halted everywhere during the warning strikes. However, it was possible to restart production afterwards without any major problems. With regard to the second warning strike, VW also explained that it wanted to keep the impact as low as possible and had taken specific measures to ensure an emergency supply.
However, industry expert Frank Schwope from the Fachhochschule des Mittelstands in Hanover warned: "A prolonged, escalating labor dispute would certainly hurt Volkswagen and could also damage its image among the public and in politics."
Agreement by Christmas?
Both sides had repeatedly stated that they would prefer to reach an agreement before Christmas. However, Cavallo warned that the window of opportunity for this is getting narrower and narrower. VW had also recently expressed caution with regard to reaching an agreement before the end of the year.
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