Labor groups at German carmaker Volkswagen (VW) have proposed pay cuts to avoid threatened factory closures and mass layoffs in Germany, amid a major cost-cutting program proposed by management.
The IG Metall union and Volkswagen’s works council on Wednesday presented the proposal to cut labor costs by about €1.5 billion ($1.6 billion), ahead of the next round of collective bargaining talks with Volkswagen management.
In return, the union and works council demanded that the company guarantee job security and the future of Volkswagen’s nine German factories.
They also expressed an openness to flexibility around staff working hours if it meant avoiding job losses.
Volkswagen management canceled a decades-old job security deal in September, warning that disappointing financial performance at the brand could necessitate major job cuts. Management has also reportedly demanded a 10% pay cut for the German workforce.
Labor Party representatives have pledged massive resistance to any closures or mass layoffs.
“Because sustainable solutions are needed, we are now going on the offensive and presenting a solution concept,” said works council chairman Daniela Cavallo at the presentation of the concept in Wolfsburg. “It is a counter model to the board’s plan to cut jobs, preventing the future instead of creating it.”
The works council’s own plan, on the other hand, “does not involve factory closures or forced layoffs,” says Thorsten Gröger of the IG Metall union.
Cavallo spoke of a “master plan that ensures the future long-term viability of the company.”
She said that unions at Volkswagen are not fundamentally opposed to staff cuts, but insist that any cuts are carried out in a socially responsible manner.
Cavallo also insisted that management should forego bonuses and contribute part of their wages to also secure the company’s future.
“It is now up to VW to also take its responsibility and enable quick solutions,” said Gröger.
If the company’s management fails to commit, it would “deliberately provoke an escalation,” which Gröger said the union hopes to avoid by reaching an agreement before Christmas.
“But we are equally clear: the workforce is ready to fight and preparations are underway,” he said.
A mandatory labor peace that prevents strikes or other labor action expires at the end of the month.
