Angry VW union to ratchet up dispute after labour deals cut short

By Rachel More

HANOVER, Germany, Sept 30 (Reuters) - Volkswagen terminated several wage deals with IG Metall on Wednesday, raising the possibility of strikes at the start of next year as Germany's top industrial union vowed to escalate its dispute with the world's second-largest automaker.

IG Metall representative Thorsten Groeger, brandishing a letter he said included the termination of various Volkswagen agreements, vowed a tough dispute from the turn of the year, with a strike truce currently set to expire on January 1.

The industrial relations battle comes as Chinese carmakers sharpen their focus on Europe, piling pressure on costly German manufacturing sites, with Mercedes-Benz also threatening two plant closures.

Volkswagen said it had terminated various wage agreements with effect from December 31, 2026, although its landmark 2024 labour agreement containing job guarantees and promised investment for certain German plants was not affected.

Groeger said IG Metall was "very disappointed" that VW management was not in a position to discuss the 2024 labour guarantees, but acknowledged the situation was difficult.

Volkswagen works council chief Daniela Cavallo said workers had received no commitments over threatened plants and would insist that the automaker stick to the 2024 labour deal.

Volkswagen said the two sides had agreed to meet again in the second half of October.

With strikes possible from January 1 next year, Volkswagen's move marks an escalation in its dispute with labour representatives over the most radical restructuring in the group's history.

The overhaul includes tens of thousands more layoffs and the closure of up to four German production sites.

Despite clinching a breakthrough in early September with the supervisory board's blessing, Volkswagen Group CEO Oliver Blume now faces union anger over pushing through the cuts.

Volkswagen last cancelled parts of its collective bargaining framework with the union in September 2024, triggering a wave of strikes that culminated in a landmark labour deal for 35,000 job cuts in return for guarantees. 

(Writing by Rachel More and Kirsti Knolle; Editing by Thomas Seythal, Miranda Murray, Kirsten Donovan and Alexander Smith)