Volkswagen Faces Turbulence as Wage Negotiations Continue

Volkswagen is engaged in prolonged negotiations with labour leaders over pay and jobs to avoid mass strikes. The talks arose due to the need to compete with cheaper Chinese rivals and slower electric vehicle adoption. Draft proposals are in play, with decisions on plant closures pending.

Volkswagen is nearing a pivotal deal with its labour leaders following prolonged negotiations over wages and employment terms, aimed at averting widespread strikes. However, the outcome remains uncertain as Europe's largest automaker contends with cost-cutting measures amid competition from more affordable Chinese rivals and tepid demand in Europe.

IG Metall is set to brief the media on the negotiation status, a day after 100,000 workers staged Volkswagen's largest strikes in its 87-year history, protesting wage reductions and potential plant closures. Despite initial progress, sources suggest draft proposals could still be rejected by company boards or worker commissions.

Negotiations continue with a focus on securing a deal before Christmas. Amid plans for potential plant sales and closures, analysts stress the impact of strike threats on financial targets, as investor confidence wavers with Porsche SE, a major stakeholder, warning of possible significant impairments.

(With inputs from agencies.)