Volkswagen workers strike across Germany in battle against cuts

Workers at Volkswagen plants across Germany walked off the job in waves on Monday for temporary work stoppages, marking the start of nationwide strikes against the German auto giant.

About 66,000 VW employees – more than half of VW’s factory workforce in Germany – joined the strikes, according to the IG Metall trade union. The demonstrations began with a two-hour work stoppage on Monday morning at VW’s plant in the eastern German city of Zwickau.

At VW’s flagship plant in Wolfsburg, thousands of workers marched through the production lines chanting “Ready to strike! Nationwide!” before rallying in front of VW management’s office building at the carmaker’s sprawling headquarters.

The trade union announced the strikes to protest plans by VW management to slash billions of dollars in costs. Mass lay-offs, plant closures and across-the-board pay cuts for VW workers are reportedly all on the table.

Volkswagen did not initially provide any information on possible production stoppages as a result of the strike. A spokesman said at the weekend that the company had made preparations to minimize the impact.

Leadership at Europe’s largest carmaker has said major cost reductions are needed to boost sagging financial results and secure the company’s future against tough international competition.

Management flatly rejected as insufficient a previous labour offer to allow greater flexibility to cut working hours as well as forgo salary increases over the next two years.

‘This is just a warning!’

Monday’s wave of strikes are expected to involve two-hour work stoppages on every shift across the country, according to the trade union. The strikes are planned to end at the close of the overnight shift on Tuesday morning.

Thousands of VW workers also rallied outside VW factory gates in Zwickau and the north-western German city of Emden. In Braunschweig, more than 1,000 VW employees marched through the city.

“We will fight fiercely for every job!” Dirk Schulze, the IG Metall leader in eastern Germany, declared to rallying workers in Zwickau.

In Emden, IG Metall’s regional leader, Daniel Friedrich, warned Volkswagen management to back down from the cost-cutting plans: “Otherwise it won’t just be the tree that burns at Christmas, otherwise every single plant will burn.”

All but one of Volkswagen’s 10 factories across Germany were hit by the strikes on Monday.

The Germany-wide walkout hurts Volkswagen, Thorsten Gröger, IG Metall’s chief negotiator, said in Wolfsburg.

“But this is just a warning!” Gröger added. “Anyone who ignores the workforce is playing with fire – and we know how to turn sparks into flames!”

The head of the VW works council, Daniela Cavallo, said the next round of collective bargaining talks with VW management on December 9 will decide the course of future labour action.

“If we have to, we will take industrial action that suits Volkswagen,” she said.

A mandatory labour truce at VW, which prohibited strikes, expired over the weekend, paving the way for industrial action.

The talks directly apply to about 120,000 workers at Volkswagen’s plants in western Germany. Any agreement would also have direct implications for another 10,000 workers employed at Volkswagen plants in the eastern German state of Saxony.

Auto sector expert Frank Schwope, who lectures on industry economics in Hanover, said the two-hour strike should be bearable for VW – but the company would face more serious risks if the struggle with the workforce gets worse.

“A prolonged, escalating labour dispute would certainly hurt Volkswagen and could also damage its image among the population and in politics,” Schwope said.

High stakes at VW

Volkswagen workers are demanding pay raises and job protections in ongoing collective bargaining talks, including the preservation of all company locations in Germany, while management has pushed workers to accept a 10% across-the-board pay cut instead.

According to the Volkswagen works council, management has also discussed shutting down three of the carmaker’s plants in Germany, an unprecedented step at the long-time German manufacturing icon that would cost tens of thousands of jobs.

Weak demand, increased competition and a tougher Chinese market have all contributed to Volkswagen’s woes.

The carmaker has previously stated that, due to slumping sales in Europe, the company currently has unused capacity to produce about 500,000 additional vehicles every year at its plants, or roughly the total capacity of two entire factories.

VW boss Thomas Schäfer recently described plant closures as likely unavoidable if the company hopes to remain competitive.

Volkswagen has never shut down a plant in Germany, and it’s been decades since the carmaker has closed a production facility anywhere in the world.

Performance at the VW core brand in particular has lagged behind other marks in the VW Group portfolio, with executives also citing difficulties in transitioning toward electric vehicles.

In the first nine months of the year, the VW Group’s profits plummeted – although the company remains far from being in the red. From January to September, VW posted after-tax profits of €1.58 billion ($1.66 billion).

Executives, however, have argued that larger profit margins are needed at the Volkswagen brand to finance major investments needed in the coming years to transition to electric vehicles and launch new models.