Volkswagen is grappling with mounting competition from Chinese carmakers, weakening demand for electric vehicles (EVs), and a sluggish German economy. In October, the company announced plans to close at least three German production facilities and lay off tens of thousands of workers.

To further reduce costs, Volkswagen proposed a 10% pay cut for remaining employees, outsourcing entire divisions, and downsizing production at the plants that remain operational. These moves followed the company’s second profit warning in just three months, citing a narrow 2.1% profit margin for its brand.

Arne Meiswinkel, Volkswagen AG’s chief negotiator, voiced concern over these challenges. “The trends in Europe’s auto industry, especially in Germany, are deeply troubling,” he said. “We must cut labor costs to secure jobs and ensure the company’s future.”

Workers Respond With Strike Plans

In response to these measures, Volkswagen workers in Germany are preparing to strike in early December. Union IG Metall has labeled the strike “necessary” after negotiations with management over cost-cutting measures failed. “Strikes are both possible and necessary from the beginning of December,” the union stated in a pamphlet.

The union stressed that Volkswagen’s leadership will determine the severity and length of the conflict. “The VW workforce nationwide is ready to strike,” IG Metall added, as reported by RTE News.

Calls for Alternative Solutions

Employees have expressed dissatisfaction with the company’s demands. The workers’ council proposed an alternative cost-cutting solution, suggesting that Volkswagen’s upper management should forgo their bonuses to reduce expenses.

This suggestion underscores the growing frustration among workers as tensions rise. The strikes are a direct response to management’s decisions, signaling a significant escalation in the conflict.