(Bloomberg) -- Volkswagen AG’s management and labor leaders remain far from a deal as the two sides hunkered down for a second day of negotiations over proposed layoffs and factory closures, people familiar with the matter said.
VW brand Chief Executive Officer Thomas Schäfer and human relations chief Gunnar Kilian, who took part in Monday’s talks in Hanover, are set to tell the group’s management board that the prospect of an imminent deal are dim, according to the people, who spoke on condition of anonymity because the discussions are private.
Tuesday’s negotiations are expected to go late into the night, they added.
If insufficient progress is made on a deal by early Wednesday, the board of union IG Metall is prepared to hold a vote at the end of the week to pave the way for 24-hour walkouts across VW factories in January. Already on two occasions this month, tens of thousands of VW workers temporarily abandoned their posts in protest of management’s proposed cuts. Both sides have aimed for a deal by Christmas.
The complexity of the talks has made that timeline optimistic, according to the people. Plans to restructure the VW brand are converging with wage negotiations and Volkswagen group’s regular five-year planning round, which involves model-production assignments to the carmaker’s network of factories.
VW, 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. The carmaker is struggling with waning demand for electric vehicles in Europe and increasing competition in China from local manufacturers led by BYD Co.
VW and the works council declined to comment.
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