Volkswagen faces potential strikes as labor tensions escalates

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November 29, 2024 12:29 PM EST

Investing.com -- Volkswagen AG (ETR: VOWG) workers across Germany could stage strikes as early as next week, as tensions between the automaker and labor union IG Metall intensify over planned layoffs and plant closures.


Volkswagen on Friday rejected union proposals aimed at achieving cost savings and averting closures, escalating the standoff. The union had proposed measures totaling €1.5 billion ($1.6 billion) in savings, including forgoing bonuses for 2025 and 2026.


Germany’s assertive IG Metall union has been vocal about protecting jobs amid a wave of cost-cutting measures across the auto industry. Volkswagen, like other automakers, has recently announced layoffs in response to weak demand and broader economic challenges as Europe's largest economy struggles to regain momentum.



Volkswagen has demanded a 10% wage cut, arguing it needs to slash costs and boost profit to defend market share in the face of cheap competition from China and a drop in European car demand. It is also threatening to close plants in Germany for the first time in its 87-year history.





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