Volkswagen AG’s labour leaders in a bid to steady the beleaguered carmaker, have proposed €1.5 billion ($1.6 billion) in cost cuts, as management seeks broad savings to address slumping demand, high operational costs, and intensifying competition from Chinese manufacturers.
The VW’s works council chief, Daniela Cavallo, unveiled the plan on Wednesday, suggesting suspension of portions of bonuses for workers, executives, and board members.
This move is part of a larger €17 billion cost reduction target set by management, with labour costs representing a smaller fraction, according to Bloomberg.
In a press briefing ahead of Thursday’s talks, Cavallo accepted the need for workforce adjustments but argued that labour’s strategy would avert factory shutdowns
The two sides are scheduled to meet for a third round of negotiations on Thursday, with significant differences remaining on how to address the challenges facing VW.
If VW sticks to its demands including shuttering plants, then it needs to brace for “an industrial dispute over locations like this country hasn’t seen in decades,” Thorsten Groeger, the lead negotiator for the labor side, said at the same event.
