Gulf over VW German plant closures stays in marathon talks with union

By Christina Amann

HANOVER, Germany (Reuters) – Germany’s IG Metall union has accused Volkswagen (ETR:VOWG_p) of delaying essential selections towards an settlement over pay and job safety, including that either side disagreed in key areas and that talks might nonetheless collapse.

In the meantime, Europe’s largest carmaker described the discussions as complicated and declined to touch upon the union’s criticism.

The evaluation by the opposing sides got here after some 60 hours of talks geared toward avoiding strikes in negotiations that embrace jobs and the way forward for the carmaker’s German vegetation.

Talks between Volkswagen and labour leaders in regards to the numerous cost-cutting measures at Volkswagen will proceed into Friday, each events mentioned.

“Negotiations haven’t been aborted, however we now count on the corporate to offer readability as rapidly as attainable,” IG Metall mentioned in a press release.

Talks have been occurring late into the evening since Monday within the hope of reaching a deal earlier than Christmas and stopping doubtlessly damaging large-scale industrial motion, which Germany’s strongest union IG Metall has warned might start early subsequent 12 months.

Round 100,000 staff have already staged two separate strikes prior to now month, the most important in Volkswagen’s historical past, protesting towards administration plans to chop wages, cut back capability and doubtlessly shut German vegetation for the primary time.

There was important progress on the difficulty of wages, however it’s not clear whether or not there could be an settlement earlier than Christmas, one other supply mentioned, including that the way forward for VW’s Osnabrueck and Dresden vegetation seems unsure.

IG Metall mentioned that whereas some progress had been made within the discussions, which initially began in September, they remained at loggerheads in different areas. “Accordingly, an extended interruption or termination of the fifth spherical of negotiations is at all times among the many attainable situations for an final result,” a spokesperson for the union mentioned earlier.

GERMAN UPHEAVAL

The disaster on the German automaker has hit at a time of uncertainty and political upheaval in Europe’s largest economic system, in addition to wider turmoil among the many area’s automakers. The best way to repair Germany’s sluggish progress has taken centre stage as a marketing campaign difficulty forward of a snap election in February.

VW’s construction is exclusive, with administration having to get approval from a two-thirds majority within the 20-strong supervisory board for any determination to construct or transfer a manufacturing plant. Meaning 10 members representing German labour unions can veto any far-reaching plans that have an effect on factories.

Any settlement with the union would require approvals by Volkswagen committees which additional complicates and delays a attainable deal, one of many folks mentioned.

Staff strongly oppose plant closures, however Volkswagen has mentioned that the transfer could also be vital to search out round 4 billion euros ($4.2 billion) in required price cuts and reply to what it expects is structurally weaker demand in Europe.

Situations below dialogue embrace capability cuts slightly than full plant shutdowns, the sources mentioned, including that one chance may very well be shifting manufacturing of the Golf mannequin to Mexico from VW’s primary plant in Wolfsburg.

Volkswagen can be grappling with nimble and cheaper Chinese language rivals in addition to a slower-than-expected adoption of electrical autos.

Citing folks conversant in the matter, Bloomberg reported earlier that Volkswagen and unions have been nearing an settlement to restructure the VW model with out closing factories in Germany.

Administration is keen to maintain vegetation working and restore job safety agreements till 2030 in trade for staff foregoing bonus funds, the report mentioned.

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