Volkswagen employees warned on Monday that management has one final opportunity to reach a compromise or face unprecedented strikes next year, as negotiations commence in a tense dispute over wage reductions and plant shutdowns.
VW staff downed tools at nine German sites, while thousands marched with flags and whistles to a square in Wolfsburg, where the carmaker is headquartered, to listen to union leaders.
The latest negotiations, which initially kicked off in September, come as Europe's largest carmaker seeks ways to radically cut costs in Germany to better compete with cheaper Asian rivals that have entered its home market.
The VW crisis comes at a time of uncertainty and political upheaval in Europe's largest economy, as well as wider turmoil among the region's automakers. German Chancellor Olaf Scholz, trailing in polls ahead of a snap election, warned VW against factory closures over the weekend.
Workers are staging four-hour strikes, the second walkouts in a week and for twice as long as the two-hour strikes that took place the first time.
Even before talks, union leaders were threatening more strikes if VW did not move closer to their position, but left open the possibility of a solution by Christmas.
"Today, the workforce is taking a stand in the form of a nationwide warning strike. Everywhere, at all locations, in all shifts, Volkswagen employees are stopping work, not for two hours as they did last time, but for four hours," union IG Metall chief negotiator Thorsten Groeger said.
"And if that isn't enough, the New Year's Eve fireworks will be followed by an escalation that this company has never experienced before," he said.
Groeger added that management had "one last chance" to get back on track in 2024, "then we can still find a solution with great flexibility this week or next week."
Workers, who have dismissed any cuts to wages or plant closures, can crank up the pressure on VW by eventually staging 24-hour strikes and even open-ended ones.
Volkswagen insists that capacity and wage cuts are needed because demand for cars in Europe has fallen while costs in Germany make it impossible to compete with new rivals.
Its chief negotiator, Arne Meiswinkel, said unions and management needed to find alternative ways to a solution for its German plants after rejecting a union proposal as unsustainable.
"We continue to need to reduce costs, reduce overcapacity," Meiswinkel said.
CEO Oliver Blume last week defended Volkswagen Group's decisions as necessary in a fast-changing environment, saying management could not operate "in a fantasy world."
However, Groeger urged VW to move towards the union's position.
"Trust has been destroyed ... workers are very angry. The brand VW is under threat of becoming damaged by the behavior of the board and the share price has been thrown to the bottom of the basement. That is the board's responsibility," he said
Volkswagen's stock is among the worst performers among European carmakers and has fallen by nearly 25% this year.
While the impact of the strikes was not immediately clear, the union has said several hundred cars were not built at the Wolfsburg plant alone as a result of the first round.
Automakers face rising competition from China, where EV maker BYD recently said that between August and October, it hired close to 200,000 new employees in car and component manufacturing.
