Strikes begin at German carmaker Volkswagen over wage cuts, lay-offs

Workers at Volkswagen's plant in the south-eastern German city of Zwickau began walking off the job at 9:30 am on Monday (0830 GMT), marking the start of nationwide strikes against the German auto giant.

Workers at the rest of Volkswagen's plants in Germany are expected to follow suit later on Monday morning. The IG Metall trade union, which announced the strikes to protest management threats of wage cuts and plant closures, has called for two-hour work stoppages on every shift.

The strikes are meant to signal employees' intense opposition to the company's demands for across-the-board wage reductions, as well as threats of mass lay-offs at Europe's largest carmaker as part of a major cost-cutting programme to boost sagging financial results.

Wolfsburg was among the plants to follow, the union added. Sites in Hanover, Emden, Kassel-Baunatal, Braunschweig, Salzgitter, Chemnitz and Dresden will also be affected.

"Volkswagen was not prepared to find a viable solution to the wage dispute at the negotiating table," said Dirk Schulze, the IG Metall leader in eastern Germany. He added that the strikes are needed "to increase the pressure on management."

Volkswagen workers are demanding pay raises and job protection in ongoing collective bargaining talks, while management has pushed workers to accept a 10% across-the-board pay cut instead.

According to the Volkswagen works council, management has also discussed shutting down three of the carmaker's plants in Germany, an unprecedented step for the long-time German manufacturing icon that would cost tens of thousands of jobs.

Weak demand, increased competition and a tougher Chinese market have all contributed to Volkswagen's woes.

The carmaker has previously stated that, due to weak demand in Europe, the company currently has unused capacity to produce about 500,000 additional vehicles every year at its plants, or roughly the total capacity of two entire factories.

Performance at the VW core brand in particular has lagged behind other marks in the VW Group portfolio, with executives also citing difficulties in transitioning toward electric vehicles.

IG Metall's chief negotiator Thorsten Gröger said on Monday that production would be "temporarily suspended" in all affected plants.

A mandatory labour truce at VW, which prohibited strikes, expired over the weekend, paving the way for industrial action.

IG Metall is demanding the preservation of all company locations and job security.

The talks directly apply to about 120,000 workers at Volkswagen's plants in western Germany. Any agreement would also have direct implications for another 10,000 workers employed at Volkswagen plants in the eastern German state of Saxony.

Volkswagen has never shut down a plant in Germany, and it's been decades since the carmaker has closed a production facility anywhere in the world.