(Bloomberg) -- Volkswagen AG workers walked off their jobs on Monday as union leaders threatened to escalate protests against painful cuts at the carmaker’s namesake brand if talks with management failed to yield a breakthrough.
The walkouts — the second this month — began just hours before VW representatives and the powerful IG Metall union were scheduled to start a fourth round of talks in Wolfsburg. Thousands of workers gathered in the rain on the factory grounds in a show of solidarity.
Thorsten Gröger, lead negotiator for the workers, said the complexity of VW’s problems may require further talks, which labor is open to, with the goal of a reaching deal before Christmas. But if no progress is made on a compromise, workers are ready to escalate their protests from temporary walkouts to full-blown strikes, he said.
“There will only be one answer to the cost-cutting hammer: the strike hammer,” Gröger told the workers. “We will gather strength over the Christmas period, recharge our batteries, and then in 2025 we will confront the board with strikes that will shake the board’s high-rise office building.”
Monday’s so-called warning strikes are raising pressure on VW to break a stalemate with the labor over management’s plan to shutter factories and lay off thousands of workers to make the carmaker competitive.
Nearly 100,000 workers left their posts last week after management had rejected a union proposal that included lowering dividend payouts and cutting some bonuses.
Arne Meiswinkel, lead negotiator for VW management, reiterated the company’s position Monday morning, saying any solution has to reduce overcapacity and sink factory costs in a sustainable way.
VW management, led by group CEO Oliver Blume, is seeking to fill a €4 billion ($4.2 billion) gap in their €17 billion savings program for the VW brand and related units. Management wants savings on top of what labor offered in their counter-proposal to facilitate investment into the models being planned through 2030 and beyond.
The stalemate and walkouts are costly for VW, which is struggling to cope with higher operational costs, a drop in demand for electric vehicles and intensifying competition from Chinese carmakers. Two hours of halted production at four assembly lines at VW’s main plant in Wolfsburg translates into a loss of roughly 400 to 600 vehicles.
VW’s corporate structure gives workers a strong voice in key decisions, making it difficult for management to push through painful cost cuts. Employee representatives occupy half of the company’s supervisory board seats, while VW’s home state of Lower Saxony holds an additional two seats.
(Updates with threat of full strikes next year beginning in third paragraph.)
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