Thousands of Volkswagen workers were due to go on strike on Monday in an escalating industrial dispute at the crisis-hit German car giant with thousands of jobs at stake.
VW has been hit hard by high manufacturing costs at home, a faltering transition to electric vehicles and fierce competition in the key market of China. He announced a plan to cut costs by billions of dollars.
The powerful IG Metall union and the works council have been fighting to protect jobs since VW announced in September that it was considering the unprecedented step of closing factories in Germany, where it has around 120,000 employees.
“Warning strikes will begin on Monday at all plants,” said IG Metall negotiator Thorsten Groeger, announcing the short walkouts after the company last week rejected union proposals to protect jobs.
“If necessary, this will be the most difficult wage dispute Volkswagen has ever seen,” Groeger warned in a statement on Sunday.
He accused that “Volkswagen has set fire to our collective agreements” and that the company’s management is now “throwing open barrels of gasoline into it.”
“What follows now is a conflict caused by Volkswagen – we didn’t want it, but we will fight it with as much dedication as it takes!”
VW said it “respects workers’ rights” and believes in “constructive dialogue” to try to reach a “durable solution that is collectively supported”.
It also said it had taken “measures to guarantee emergency deliveries” during the strike.
The crisis at the German industrial titan comes as the eurozone’s biggest economy struggles and amid heightened political uncertainty with elections looming in February.
Volkswagen’s dire financial position was highlighted in October when it reported a 64 percent drop in third-quarter profit to 1.58 billion euros ($1.7 billion).
The slowdown in China, where domestic competitors outsell the German automaker, is a particularly hard blow.
VW cited “economic reasons” last week when it announced the sale of its operations in China’s Xinjiang region, although the company has also come under pressure to exit Xinjiang due to human rights concerns.
Further clouding the outlook is the EU’s move to impose high tariffs on Chinese-made electric cars, which VW fears could trigger retaliation.
Its problems reflect a wider crisis in Europe’s auto industry, with weak demand and a slower-than-expected transition to electric cars.
In Germany, VW, BMW and Mercedes-Benz recently cut their profit forecasts, while key industry suppliers are announcing job cuts.
