Volkswagen rejects union proposal as strikes loom – DW – 11/29/2024 | EUROtoday

Volkswagen mentioned on Friday {that a} proposal offered by the IG Metall commerce union and the corporate’s works council wouldn’t saved the prices it claimed it might, and wouldn’t have proved a long-term answer.

“Although there may also be positive effects in the short term, the measures will not lead to any sustainable financial relief for the company in the coming years,” VW mentioned in a press release, including that it might stay involved with labor representatives.

The two sides are locked in tough negotiations on pay, with VW calling for staff to just accept pay cuts — arguing that they’re overpaid by the sector’s requirements — and warning of the potential for plant closures and layoffs.

The German automobile large says its long-term survival could possibly be at stake until it takes steps to adapt its prices and manufacturing capacities to falling gross sales and demand in Europe specifically, and elsewhere.

What had unions proposed?

The unions had proposed that employees and administration alike conform to a pay freeze and to foregoing bonuses in 2025 and 2026.

In return it had known as for ensures on sustaining job numbers and never closing amenities.

It had additionally successfully known as for negotiations on elevated pay, however had mentioned this cash ought to go right into a fund that will compensate any who did face layoffs.

“Sustainable savings of €1.5 billion ($1.58 billion) cannot be ascertained even after intensive analysis,” VW mentioned of the proposal, questioning the potential financial savings touted by IG Metall and the employees council.

Why does VW say it should lower prices?

Volkswagen says that it believes falling new automobile gross sales figures in Europe and elsewhere because the coronavirus pandemic will not be prone to recuperate to their earlier ranges.

In phrases of passenger automobiles, simply over 13 million have been offered within the EU in 2019, in line with the ACEA producers’ affiliation. By 2023, that determine was 10.5 million; an additional discount is projected this yr.

As a results of this, and to guard itself in opposition to rising low-cost competitors from locations like China, VW says it must restructure and scale back manufacturing capability.

It additionally says that it will probably not afford to overpay its workers by the requirements of the German carmaking sector, because it historically did in a bid to lure prime employees to its headquarters in Wolfsburg, which isn’t precisely Germany’s most vibrant metropolis.

What comes subsequent?

As the negotiations progress with out settlement, the commerce unions’ scope to strike will increase.

Reuters information company reported on Friday that it had obtained IG Metall paperwork despatched to members, who’ve already voted in favor of strikes if the union deems them vital, saying that they have been probably in December.

“Strikes are possible and also necessary from the beginning of December,” IG Metall mentioned within the handout, noting that an settlement to not stage walkouts would finish on Saturday.

“IG Metall has taken a huge step towards Volkswagen’s management in the negotiations,” it mentioned, arguing that Volkswagen had not made clear what concessions it was keen to make.

msh/wd (AFP, dpa, Reuters)