Strikes warning as pay talks get underway at Volkswagen

Unions at Volkswagen warned on Wednesday of potential strikes at the carmaker's German factories, as annual pay negotiations got underway.

Europe’s largest carmaker told unions earlier this month that a decades-old agreement to protect jobs at German factories would end in July 2025, four years early.

VW wants to cut jobs and potentially close plants, as it strives to turn around the business and bolster under-pressure earnings.

Both the IG Metall union and the company’s works council reacted angrily to the announcement, and on Wednesday, as pay talks got underway they warned strikes would be possible from 1 December.

Speaking at an employee rally in Hanover, works council chair Daniela Cavallo accused executives of "breaking taboos that are historic", the Financial Times reported.

"But our reaction as the employee side will be just as historic."

IG Metall, which has vowed to fight any proposed factory closures, is seeking a 7% pay rise.

VW currently employs around 130,000 people in Germany.

The German economy, which is heavily reliant on manufacturing, has been hit hard in recent years by surging inflation, record energy costs, labour shortages, stiff competition and weak global demand, especially in China.

Carmakers have been hit particularly hard, with both Mercedes-Benz and BMW trimming profit forecasts in recent weeks.

Arne Meiswinkel, Volkswagen’s head of human resources, warned that Germany was "falling behind the competition", Reuters reported.

"Our core brand Volkswagen is particularly affected by this. International competition is threatening to overtake us. We must work together to restructure our company. The situation is serious."