German Auto Workers on Collision Course: Strikes Loom Over Volkswagen Dispute

German labor unions threaten a strike against Volkswagen over proposed €17 billion cost reductions. Negotiations focus on pay cuts and avoiding factory closures. IG Metall demands contributions from Volkswagen's controlling families while the automaker faces challenges from expenses and Chinese competitors.

Amid ongoing tensions, German labor unions on Wednesday warned of a potential strike against Volkswagen in response to planned cuts of over €17 billion, raising concerns of industrial action at a critical time for the country's automotive sector.

The negotiations, centered around significant pay cuts and potential plant closures, reflect significant unease among workers, who demand that Volkswagen's controlling Porsche and Piech families contribute to cost-saving measures.

Volkswagen argues that substantial reductions, including potential closures and a 10% pay cut, are necessary for future viability, highlighting an internal memo revealing higher labor costs compared to competitors. Unions are poised for potential strikes from December if an agreement isn't reached.

(With inputs from agencies.)