Volkswagen's workers threaten strikes unless it reinstates wage deals

By Christoph Steitz

FRANKFURT, Oct 23 (Reuters) - Volkswagen workers on Friday threatened strikes from January unless Europe's top automaker reverses a recent cancellation of wage deals by the end of next week.

The dispute over planned cutbacks came to a head last month when Volkswagen terminated almost all wage deals with German workers, putting long-standing labour standards including working hours and holiday pay up for renegotiation.

Volkswagen plans to cut 100,000 jobs and could close up to four plants in Germany in what would be its biggest-ever overhaul, as it faces fierce Chinese competition, billions in tariff costs and a costly shift to electric vehicles.

The plan targets €20 billion ($22.4 billion) in cost cuts along the value chain by 2030, while overheard costs are also expected to be lowered by an additional €11 billion, Volkswagen has said.

"We are giving the company until the end of October to withdraw this notice of termination," IG Metall's chief negotiator Thorsten Groeger said in Hanover, where unions and management met for a fresh round of talks.

"Otherwise a massive process will be set in motion which, let me make this clear, will pave the way for industrial action at Volkswagen," he added.

Industrial action typically encompasses strikes, which are ruled out before January 1 under a current truce. Volkswagen's management "should mark this date clearly in their diaries", Groeger said.

Following Friday's round of talks IG Metall said Volkswagen was sticking with the termination, forcing unions to prepare for a clash in the new year.

The union accuses the German carmaker of shirking commitments made in a landmark deal in late 2024, while Volkswagen says it is pursuing every available option to cut costs and safeguard competitiveness.

"The economic situation has deteriorated dramatically since the collective bargaining agreement for the future was concluded in 2024. This creates an urgent need for action," Volkswagen executive Arne Meiswinkel said after the talks.

Volkswagen's works council said on Monday that the company's executive board plans to freeze the salaries of 660,000 staff worldwide until 2030.

"We know which operating conditions have changed, but we also know which ones were foreseeable, and we expect the highest-paid management board in this country to work with us to find a solution," said works council chief Daniela Cavallo.

Volkswagen has declined to comment on specific cost-cutting and restructuring actions it may pursue in German wage negotiations.

Both sides will start official negotiations on the cancelled wage agreements on November 24 at Volkswagen's Emden site, and continue talks on December 15 in Zwickau, Volkswagen said.

Volkswagen said this could include so-called transfer companies, set up with support from the federal employment agency to retrain workers and help them find new jobs outside Volkswagen.

($1 = 0.8928 euros)

(Reporting by Christoph Steitz; Additional reporting by Ilona Wissenbach and Rachel More; Editing by Ludwig Burger, Linda Pasquini, Alexander Smith and David Gregorio)