Key facts
- IG Metall threatened escalation in its dispute with Volkswagen over job cuts and termination of wage agreements.
- Volkswagen plans to terminate wage agreements effective December 31, 2026.
- Strikes are possible from January 1.
- The dispute comes as Chinese rivals increase focus on the European market.
- Volkswagen could terminate parts of its collective bargaining agreements covering about 100,000 workers.
Germany's top industrial union IG Metall threatened an escalation in its dispute with Volkswagen over planned job cuts and the termination of wage agreements, according to a union statement. Labour representatives are holding talks with management in Hanover over the biggest overhaul in the German auto group's history, with strikes possible from January 1.
The brewing fight comes as Chinese rivals sharpen their focus on the European market, piling pressure on costly German manufacturing sites, with Mercedes-Benz also threatening two plant closures. Volkswagen could terminate parts of VW's system of collective bargaining agreements, including an umbrella wage agreement covering some 100,000 workers at its main German plants, though a landmark 2024 deal with job guarantees was not affected, according to sources involved in the talks. This could force renegotiation of certain labor standards as Volkswagen aims to drastically reduce costs.
The move marks an escalation in Volkswagen's row with labor representatives over the most radical restructuring in the group's history, including tens of thousands more layoffs and the closure of up to four German production sites. Group CEO Oliver Blume now faces union anger over how he plans to push through the cuts. Volkswagen last cancelled parts of its collective bargaining framework with the union in September 2024, triggering a wave of strikes that culminated in a landmark labor deal for 35,000 job cuts in return for guarantees. That deal is now under threat from the planned ramp-up of redundancies and production cuts, according to labor representatives.