Volkswagen faces more costly walkouts as union talks enter fourth round

VOLKSWAGEN (VW) workers are poised to walk off their jobs for a second time this month on Monday (Dec 9) as management and labour leaders enter a fourth round of talks over painful cuts at the carmaker’s namesake brand.

The so-called warning strikes are raising pressure on VW to break a stalemate with the powerful IG Metall union 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. Works council chief Daniela Cavallo has said Monday’s talks are “likely to determine the way forward: compromise or escalation”.

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. BLOOMBERG

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