The collective bargaining conflict at Europe’s largest car manufacturer Volkswagen becomes a trembling game. According to IG Metall, both sides of the collective bargaining round at Volkswagen that has been going on for days are “on a constructive path” – but at the same time there is still “disagreement” on key issues. The union announced on Thursday evening that the negotiations could still fail because of this. On Friday morning, negotiating circles said that both sides were “getting closer”. The talks were scheduled to continue on Friday morning.
Even after a marathon negotiation that lasted around 60 hours, no result was available late on Thursday evening. There is still no agreement, the union said IG Metall and Volkswagen with. The talks would continue into the night. According to an insider, the collective bargaining parties continue to fight over job security and the future of the vehicle plants. On the other hand, there is great progress in tariffs, said a person familiar with the discussions.
A spokesman for IG Metall had also previously spoken of progress in some areas. However, it remains unclear whether the conflict can be resolved before Christmas. If it is not possible to reach a new collective agreement for the approximately 130,000 VW employees, there will be a risk of strikes starting in January. According to the union, around 100,000 VW employees had already taken part in two warning strikes in the past few weeks.
Longest round of negotiations in VW history
Since Monday, negotiators from both sides have booked themselves into a hotel in Hanover in order to achieve a breakthrough in the collective bargaining talks in the fifth round of negotiations. It is already the longest round of negotiations in the company’s history – longer than the one in 1994, in which a four-day week was agreed. IG Metall and management negotiated through the night.
The employees had drawn red lines in advance regarding locations and employment: works council boss Daniela Cavallo (49) had repeatedly stated that there would be no factory closures with her. The union also rejects mass layoffs and wage cuts.
Management demands a 10 percent pay cut
In the conflict, Volkswagen management is demanding, among other things, a 10 percent wage cut and threatening to close plants. Chief Financial Officer Arno Antlitz (54) repeatedly referred to massive overcapacity: Two million fewer cars would be sold on the European car market than before the pandemic. For VW, this means that there is a shortage of around 500,000 vehicles per year – that is equivalent to the production of two larger plants. According to data from the European industry association ACEA, the European market continued to lose momentum in November, with sales falling by 1.9 percent. Things are going particularly badly for electric cars, while hybrids are in demand. The works council recently criticized the fact that VW hardly offers any models of this type of drive.
Should a production facility in Germany closed, that would be a first in the history of the Wolfsburg car manufacturer. The factory in Osnabrück, where the T-Roc convertible and Porsche-Models are built. However, production of these vehicles will end in spring 2026 – by then it must be clear what should happen to the system. So far, VW has not made any commitment to a new model. The Transparent Factory in Dresden has also been on the scratch list for a long time. Small numbers of the ID.3 electric car are currently being built in the facility that former VW boss Ferdinand Piëch once had built for the Phaeton.
The planning round is currently underway to decide on plant occupancy for the coming years and which interacts with collective bargaining. According to a report in “Handelsblatt”, VW is considering, among other things, relocating production of the Golf to the plant in Puebla in Mexico.