Volkswagen employees attend a rally in front of the automaker's headquarters, in Wolfsburg, Germany, on Dec. 9.Martin Meissner/Reuters
Crunch talks between Volkswagen AG and unions over cuts to the auto maker’s German operations continued on Wednesday and are expected to last into the night, reflecting intense efforts to strike a deal before Christmas and avert major strikes in 2025.
Earlier in the day, both sides had taken a brief break after 36 hours of negotiations which began on Monday, seeking to end a bitter standoff over potential factory shutdowns and mass layoffs that has thrown Europe’s top auto maker into its biggest crisis in years.
An agreement before Christmas is possible, a person familiar with the negotiations said, while cautioning that the complexity of the talks, which initially kicked off in late September, meant there is no guarantee of a compromise.
Germany’s IG Metall union, which has vowed fierce resistance to any plant shutdowns and staff cuts, said it would provide an update depending on any new developments, adding it was currently not clear when that would be the case.
The two sides have been trading blows over what Volkswagen says are necessary cost cuts to be able to compete with more agile and cheaper Asian rivals, all while an expected transition to electric vehicles has lost momentum.
Both have stuck to their red lines, with unions opposed to any plant shutdowns, while Volkswagen does not rule them out, citing a shrinking European market and the need to cut overcapacity.
Germany’s most powerful union hopes for an agreement this week to give workers peace of mind before Christmas, threatening to escalate strikes in the new year if no deal is struck.
The crisis at Volkswagen has already spilled over to its investors, with top shareholder Porsche Automobil Holding SE last week warning of potential impairments of up to €20-billion ($30-billion) on its 31.9 per cent stake in the auto maker.
Porsche SE, which is majority-owned by the Porsche and Piech families and holds the majority of voting rights in Volkswagen, is backing Volkswagen “to push for tough cuts,” CEO Hans Dieter Poetsch said in a statement on Monday at the start of the latest round of talks.
“We are convinced that VW is able to rightsize its business and that it will prevail in this challenging competitive environment,” Mr. Poetsch, who also serves as Volkswagen’s supervisory board chairman, said at the time.
The Financial Times earlier reported that the Porsche and Piech families were pushing for plant shutdowns in the continuing negotiations.