Volkswagen union starts strike on Monday over cost-cutting plan

(Bloomberg) — Volkswagen workers across Germany plan to go on strike starting Monday after labor leaders and management failed to reach an agreement on how to cut costs at the automaker’s namesake brand.

“If necessary, this will be the toughest collective bargaining battle ever at Volkswagen,” said Thorsten Groeger, chief negotiator for the IG Metall union in the Volkswagen negotiations. Warning strikes will begin at all factories, he added.

“Volkswagen has breached our collective agreement,” Grueger said, adding that management’s behavior had made the situation worse.

A Volkswagen spokesman said on Sunday the company was seeking constructive dialogue to reach a mutually supported solution, adding that it had taken concrete steps to respond to the planned strike.

Volkswagen on Friday dismissed recent suggestions from union members to avoid plant closures as insufficient.

VW management and labor leaders have been at loggerheads over how to respond to falling demand for electric vehicles, rising operating costs and growing competition from Chinese manufacturers.

While management says the company needs to close three German plants and lay off thousands of workers, union representatives have urged the plants to stay open.

In Germany, when wage negotiations reach an impasse, unions often organize warning strikes or temporary strikes to put pressure on management.

Volkswagen’s corporate structure gives employees a strong say in key decisions, making it difficult for management to unilaterally push for painful cost cuts. Employee representatives hold half of the seats on the company’s supervisory board, while Volkswagen’s home state of Lower Saxony holds two other seats.

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