BERLIN (Reuters) – Volkswagen is moving closer to an agreement with German labor leaders on wages and jobs, sources told Reuters on Friday (20).
Europe’s biggest carmaker has been in talks with worker representatives since September over measures it says are needed to compete with cheaper Chinese rivals, weak demand in Europe and slower-than-expected adoption of electric cars.
Around 100,000 workers carried out two strikes in the past at the company’s factories in Germany, in the biggest union movement at the company in Volkswagen’s 87 years. The automaker has plans to cut wages and close factories in the country to deal with the excess capacity it claims to have.
“We are getting closer,” said a source familiar with the negotiations. A second source close to the negotiations confirmed that assessment.
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VW workers strongly oppose factory closures, but Volkswagen said the move is necessary to save around 4 billion euros and respond to what it expects to be structurally weaker demand in Europe.
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VW’s structure is unique, with management having to obtain the approval of a two-thirds majority on the 20-member board of directors for any decision to build or change the layout of a factory. This means that 10 members representing German unions can veto any far-reaching plan that affects the group’s production facilities in the country.
Any agreement with the unions requires the approval of Volkswagen committees, which could complicate and delay a possible agreement.
