Update 2 - Volkswagen employees threaten to strike, demanding the company restore wage agreements.

Supplemental background information, labor leaders comment

Christoph Steitz

Reuters Frankfurt, October 23 - Employees at Volkswagen VOWG_p.DE threatened on Friday to strike from January unless Europe’s biggest carmaker reverses a recently terminated wage agreement by the end of next week.

The dispute over planned layoffs reached a boiling point last month when Volkswagen (link) unilaterally terminated nearly all wage agreements with its German staff, putting longstanding labor standards — including working hours and holiday pay — back on the negotiating table.

Volkswagen plans to cut 100,000 jobs (link) and may close up to four plants in Germany, in what would be the company’s largest ever restructuring (link). The move comes as it faces fierce competition from China, billions in tariff costs, and expensive shifts towards electric vehicles.

"We have given the company a deadline of the end of October to withdraw this dismissal notice," said Thorsten Groeger, chief negotiator for IG Metall, in Hanover. Union and management are currently holding new talks there.

"Otherwise, a large-scale action will be launched — let me make it clear, this will pave the way for industrial action at Volkswagen," he added.

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Industrial action typically includes strikes, but under the current truce agreement, no strikes will occur before January 1. Groeger said Volkswagen management "should clearly mark this date on the calendar."

The union accuses the German carmaker of reneging on commitments made in a landmark deal until the end of 2024, while Volkswagen says it is exploring every possible option to cut costs and maintain competitiveness.

On Monday, Volkswagen's employee representative council stated that the company's executive board plans to freeze pay for its 660,000 employees worldwide until 2030.

"We are aware of the changes in operating conditions, but we also know which changes were foreseeable, and we expect the highest-paid management in the country to work with us to find solutions," said employee representative council chair Daniela Cavallo.

Volkswagen declined to comment on specific cost-cutting and restructuring measures that could be adopted in the German wage negotiations. The talks will begin no later than early December, while Groeger called for negotiations to start on November 24.

One option could be to set up so-called "transfer companies" — institutions, supported by the Federal Employment Agency, that retrain employees and help them find new jobs outside Volkswagen.

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