(Bloomberg) — Volkswagen AG faces a growing threat of widespread walkouts as executives and unionists dig in over how to restructure Europe’s biggest automaker. Labor leaders are offering €1.5 billion ($1.
6 billion) in additional cost cuts — including foregoing some bonuses — to keep factories open, after management dangled the idea of closures. But the two sides remain far apart, with VW seeking much bigger reductions it insists are needed to slash excess capacity. Talks will continue on Thursday, with warning strikes expected to start in December as an agreement remains elusive.
Volkswagen is pushing for deep savings at its namesake brand, which is struggling with poor electric-vehicle sales and waning relevance in China, the world’s largest auto market. Chief Executive Officer Oliver Blume is trying to reduce expenses in Germany, where labor and energy costs are among the highest in Europe. Worker representatives on Wednesday said VW’s management is targeting €17 billion in overall cuts, of which labor is a small part.
The company is weighing measures far more radical than those that unions are willing to countenance, including closing or selling several factories in Germany — breaking a taboo in a country known for its more consensual approach to labor relations. Management has proposed selling car plants in Osnabrück and Dresden, according to people familiar with the matter. VW is also considering using its Emden site for contract manufacturing, said .