VW, unions hold 'constructive' talks, but no solution in sight

Volkswagen and its unions were far from finding common ground on tackling a crisis at its German plants but held talks on Monday that both sides described as constructive, as record numbers of the carmaker's workers went on strike across the country.

"After today's round it is clear we are still far from a solution," Volkswagen's chief negotiator Arne Meiswinkel said after over seven hours of talks.

But labour representative Thorsten Groeger said it was the first time talks had taken place in a "constructive climate" and that they were ready to return to the negotiating table on December 16.

Earlier in the day, Groeger said that unless Monday's talks took a conciliatory tone, unions saw no further room for negotiation this year and would escalate strikes to an unprecedented level in 2025.

Still, the unions remained steadfast in saying they would refuse to accept plant closures, while the carmaker said these could not be ruled out, indicating the two parties remain far apart.

VW staff downed tools at nine German sites which are under threat on Monday, while thousands of workers marched waving flags and blowing whistles to a square in Wolfsburg, where the carmaker has its headquarters, to listen to union leaders.

The latest negotiations, which initially kicked off in September, come as Europe's largest carmaker seeks ways to radically cut costs in Germany to better compete with cheaper Asian rivals that have entered its home market.

The VW crisis has hit at a time of uncertainty and political upheaval in Europe's largest economy, as well as wider turmoil among the region's automakers. German Chancellor Olaf Scholz, who is trailing in polls ahead of a snap election, warned VW against factory closures over the weekend.

Some 68,000 workers went on strike for four hours in Wolfsburg from the early and middle shifts alone, with the late and night shifts still to follow, the IG Metall union said.

The strikes are already more widespread than the last round of major industrial action at VW in 2018, when more than 50,000 workers went on so-called warning strikes over pay at six sites.

IG Metall said there have never been any real walkouts lasting 24 hours or more beyond so-called "warning strikes", which are flagged in advance and of limited duration.

Workers, who have dismissed any cuts to wages or plant closures, can crank up the pressure on VW by eventually staging 24-hour strikes and even open-ended ones.

In the 1970s, a last-minute agreement over pay disputes was reached the night before strikes were due to begin.

Cost-cutting

Volkswagen insists that capacity and wage cuts are needed because demand for cars in Europe has fallen while costs in Germany make it impossible to compete with new rivals.

"We continue to need to reduce costs, reduce overcapacity," Meiswinkel said ahead of the talks, which were taking place at the Volkswagen Arena where the VfL Wolfsburg Bundesliga team plays its soccer.

Thousands gathered, blowing whistles, chanting, booing management and holding signs such as from individual company sections saying "ENOUGH NOW! B2 IS READY FOR THE FIGHT!"

CEO Oliver Blume last week defended Volkswagen Group's decisions as necessary in a fast-changing environment, saying management could not operate "in a fantasy world".

Groeger urged VW to move towards the union's position, warning on Monday morning that the negotiations had destroyed trust in the company among workers.

"The brand VW is under threat of becoming damaged by the behaviour of the board and the share price has been thrown to the bottom of the basement. That is the board's responsibility," he said.

Volkswagen's stock is among the worst performers among European carmakers, having fallen by nearly 25 per cent this year.

While the full impact of the strikes was not immediately clear, the union has said several hundred cars were not built at the Wolfsburg plant alone as a result of the first round.

Automakers face rising competition from China, where EV maker BYD recently said that between August and October it hired close to 200,000 new employees in car and component manufacturing.

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