On December 2nd, 2024, workers from nine factories under Volkswagen in Germany started a rotating strike of two hours per shift. The reason for the strike is the disagreement between labor and management on future issues of the company’s operations in Germany.
Thousands of striking workers gathered at the Volkswagen headquarters in Wolfsburg. The impact of this strike also includes the factory in Hanover with 14,000 employees and other component and car factories in locations such as Emden, Salzgitter, and Brunswick.
A spokesperson for the union stated that just the two-hour strike at Volkswagen’s headquarters in Wolfsburg meant that hundreds of cars, including the iconic Golf, could not be produced.
The strike held on Monday was a so-called “warning strike,” a common strategy before wage negotiations in Germany.
The union mentioned that if an agreement is not reached in the next round of wage negotiations, this strike could escalate to a 24-hour or indefinite stoppage. This would decrease Volkswagen’s production output, while the company is already facing challenges of declining deliveries and plummeting profits.
Negotiators from the IG Metall union stated, “The duration and intensity of this confrontation will depend on Volkswagen’s performance at the negotiation table.”
Volkswagen expressed the need to reduce the costs of its German factories to be at a competitive level with rivals and with Volkswagen plants in Eastern Europe and South America. However, the union argued that employees should not bear the responsibility for management’s failure to develop attractive products and launch cheaper entry-level electric cars.
Daniela Cavallo, chairwoman of the Volkswagen Works Council, suggested that besides Lower Saxony, Volkswagen’s largest shareholder, including holding companies controlled by Porsche and Piech families, might need to make sacrifices in annual dividends. However, she did not elaborate on what this would entail.
She mentioned that the fourth round of negotiations scheduled on December 9th could have two outcomes: a mutual agreement or a worsening situation. She expressed less optimism about finding common ground, stating, “Unfortunately, the signals from management in recent times have not been encouraging.”
Regarding the current negotiation process, the union highlighted that factory closures, massive layoffs, and cutting existing wages are red lines.
A Volkswagen spokesperson stated that the company respects the workers’ right to strike and has taken measures to ensure basic supplies to customers while minimizing the impact of the strike.
The union mentioned that measures proposed last week, including giving up bonuses for 2025 and 2026, could save Volkswagen 1.5 billion euros (approximately 1.6 billion US dollars). However, Volkswagen rejected this proposal.
Volkswagen demanded a 10% wage cut for 120,000 German workers, citing the need to trim costs and increase profits to maintain market share.
The company proposed a plan to close three plants within Germany, the first time such a plan has been put forward in its 87-year history.
The largest car manufacturer in Europe noted that European carmakers face challenges like weak demand, high production costs, competition from Chinese rivals, and slow progress in the transition to electric vehicles.
German media reports indicated that a senior Volkswagen executive disclosed that the factories built by Volkswagen were structured to produce 16 million cars annually, but current demand is only around 14 million cars. This indicates that the company has an unused production capacity of up to 500,000 cars per year, equivalent to the total capacity of two factories. In recent years, the higher profits from the Chinese market helped cover the higher costs, but with changing circumstances, cost reduction is now necessary.
(This article references reports from Reuters and the Associated Press)