Volkswagen faces 'tough resistance' from unions as talks kick off

Volkswagen bosses and workers' representatives started crunch talks Wednesday about the ailing German auto titan's drastic cost-cutting plans, with thousands of staff staging a protest and unions vowing "bitter resistance".

VW employees, who were bussed in from plants across Germany, carried banners criticizing management and created a deafening chorus of whistles to show their disapproval.

Europe's biggest carmaker shocked the group's 120,000 employees this month when it said it was weighing the unprecedented step of closing factories in Germany as well as deep job cuts.

The move has sparked fury from staff representatives, who accuse VW's corporate leaders of mismanaging the 10-brand group and putting profits above building a sustainable future for the manufacturer.

The trouble at Volkswagen is also a heavy blow to Chancellor Olaf Scholz's government at a time the domestic economy is already struggling.

After Volkswagen's bombshell announcement, negotiations on a new pay deal were brought forward by a month, with talks being held Wednesday at the Herrenhausen Palace in Hanover.

Ahead of the talks, Thorsten Groeger, lead negotiator for the IG Metall union, told assembled workers that it was the first time in decades that management was weighing "site closures and mass redundancies".

 'Uncertainty' 

 Groeger charged that VW's management, which had already moved to axe a decades-old job protection agreement, was seeking to scare staff as they attempted to push through cuts.

"Anyone who sows fear and gambles with the future of our colleagues will reap bitter resistance," Groeger said. "You don't build the future with fear -- you destroy it with fear."

The shock announcement had created a sense of "uncertainty" about the future, Volkswagen worker Diana Hein, 47, told AFP at the demonstration.

"When they close one factory now, in two or three years it will be the same situation again," said Hein, a union representative at the group's flagship factory in Wolfsburg.

Management needed to be more "transparent" with workers about their plans, she said.

"We don't have a concept for the future at the moment -- only savings plans," said Jan-Soeren Luehr, 37, who also works at the Wolfsburg plant and is active in the union.

Daniela Cavallo, head of the powerful works council at VW, warned bosses that unions still maintain a "strong influence" at Volkswagen.

"At Volkswagen, profitability and job security are corporate goals of equal rank," she told demonstrators, who numbered over 3,000 according to organisers.

Cavallo conceded that VW was "currently experiencing severe problems on the economic side", but that employees had shown themselves "willing to compromise" in the past.

 'Serious situation' 

 Volkswagen has been hit hard by high manufacturing costs, a stuttering switch to electric vehicles, and rising competition in key market China.

Arne Meiswinkel, who is leading negotiations for Volkswagen, said the carmaker faced a "serious situation".

"We are at risk of being overtaken by international competition," he said. "We therefore have to take action. To remain competitive, we have to comprehensively restructure Volkswagen together now."

The first round of talks Wednesday aimed at assessing "the initial situation," he said.

Stephan Weil, premier of the state of Lower Saxony, which is a major shareholder in Volkswagen, counselled against large-scale job cuts.

"We expect all those involved to find a joint way forward," Weil told deputies in the regional parliament in Hanover.

The negotiations will set the terms of employment for around 120,000 workers in Germany, most of whom work at the core VW brand.

The Volkswagen Group includes a range of other brands, from Seat and Skoda to Porsche and Audi.