Volkswagen in Turmoil: Negotiations Stalled Amid Strikes

Volkswagen's management engaged in intense negotiations with labour unions over cost cuts amid high tensions, with a significant threat of strikes if no compromise is reached. The company faces substantial challenges due to cheaper competition and internal issues, leading to financial strain and a potential writedown of Porsche SE's stake.

The negotiations between Volkswagen's management and labour representatives extended late into Monday night, highlighting the urgency of reaching a cost-cutting compromise before the festive season. Unions, demanding a solution that precludes plant closures, faced resistance from the automaker, which has not ruled out such measures.

The IG Metall union has expressed uncertainty about the potential outcomes of these critical discussions, warning of unprecedented strikes in the new year if talks fail. As Europe's largest automaker battles high costs and competition from lower-cost Chinese manufacturers, the stakes are high for all parties involved.

Volkswagen's financial woes, exacerbated by past management decisions and a slow shift to electric vehicles, have seen its share price drop by over a third in the past year. Amid these difficulties, notable shareholder Porsche SE may need to write down its stake significantly, reflecting the severe pressures on the German carmaker.

(With inputs from agencies.)