VW, workers clash in latest round of talks over factory shutdowns

FRANKFURT (Reuters) – Volkswagen (ETR:VOWG_p) and labour representatives will hold a fourth round of talks over wage cuts and possible plant closures, in what has become an increasingly bitter standoff that will be flanked by strikes at the carmaker’s main German sites on Monday.

The latest round of negotiations, which initially kicked off in September, comes as Europe’s largest carmaker seeks ways to radically cut costs in Germany to better compete with cheaper Asian rivals that have entered its home market.

Negotiations will start at around 1230 CET, while workers will stage 4-hour strikes across nine of Volkswagen’s German sites, the second walkouts in a week.

“Perhaps this will bring the VW Board of Management to its senses. Otherwise we will continue to tighten the thumbscrews,” the IG Metall union said in a handout to employees on Friday. “But then it will get really, really uncomfortable.”

Workers, who flat out dismiss any cuts to wages or plant closures, can crank up the pressure by eventually staging 24-hour strikes and even open-ended ones in the case of a positive ballot.

Volkswagen, in turn, insists that capacity and wage cuts are needed because demand for cars in Europe has fallen while costs in Europe’s top economy make it impossible for the group to compete with new rivals.