Volkswagen's High-Stakes Showdown: Workers Push Back Against Factory Closures

Volkswagen workers have proposed 1.5 billion euros in cost savings to prevent plant closures in Germany, amid a significant labor dispute. They're willing to make sacrifices but warned against aggressive cost-cutting. The company faces challenges from high costs and global competition.

In a high-stakes negotiation, Volkswagen workers proposed 1.5 billion euros in cost savings on Wednesday to avoid factory closures in Germany. The offer aims to prevent a historic conflict over job cuts and shutdowns amid rising costs and Chinese competition.

The IG Metall union warned that Volkswagen seeks 17 billion euros in cuts but their cooperation hinges on support from key stakeholders like the Porsche and Piech families. An internal memo suggests management is open to discussing strategies for reducing labor costs but hasn't ruled out closures.

Union proposals include forgoing bonuses to finance temporary reductions in working hours. Despite not being in financial crisis, Volkswagen faces challenges from poor management decisions and excess capacity. Strikes are possible from December, as the company plans significant cutbacks.

(With inputs from agencies.)