BERLIN (Reuters) – Volkswagen management rejected union cost-cutting proposals on Friday, a stalled dialogue that reinforces the threat of strikes in early December at the carmaker’s German factories.

The German group is demanding a 10% drop in salaries as well as the closure of certain sites in Germany, arguing an urgent need to reduce costs and increase profits to remain competitive and defend its market share against competition. of Chinese companies and the decline in demand for cars in Europe.

Negotiations between unions and management have so far been unsuccessful.

“Strikes are possible and also necessary from the beginning of December,” the IG Metall union said in a document distributed to employees and seen by Reuters, adding that an agreement aimed at avoiding walkouts ends on November 30.

The union offered Volkswagen savings of 1.5 billion euros, in particular by waiving bonuses for 2025 and 2026.

This measure, refused by Volkswagen, will not lead to “sustainable financial relief for the company in the years to come” the group declared on Friday in a press release, adding that it would remain in contact with union representatives.

“Further discussions in an even more difficult environment would be necessary by 2026 at the latest,” a source within the group said, adding that some of the union proposals were not legally feasible.

IG Metall reiterated its cost-cutting proposals in response to Volkswagen’s statement.

So-called warning strikes, usually lasting a few hours, are expected to take place as early as Monday at the automaker’s German factories, people familiar with the matter said, which would mark the first large-scale work stoppages for the automaker since 2018.

Union representatives and management will meet again on December 9 to continue negotiations on a new collective agreement.

The unions oppose any management proposal that does not provide a long-term plan for each Volkswagen plant. They presented measures to avoid layoffs and factory closures through reduced working hours and forgoing bonuses – provisions that will form the basis of negotiations.

However, management said it was not ready to abandon discussions on plant closures.

The warning strikes could turn into 24-hour walkouts or an indefinite strike if an agreement is not reached in the next round of wage negotiations, raising the risk of a reduction in Volkswagen production at a time when the automaker is already facing falling deliveries and falling profits.

“Volkswagen will determine at the negotiating table the duration and intensity of the conflict – VW staff across the country are ready to strike,” IG Metall said.

(Written by Friederike Heine, Victoria Waldersee and Christoph Steitz, Mara Vîlcu and Etienne Breban, edited by Blandine Hénault)

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