The Volkswagen company presented proposals aimed at reducing costs for workers, with the goal of improving their financial situation and potentially avoiding the closure of factories in Germany. Arne Meiswinkel, the lead negotiator for the automotive company, reported that the measures include a 10% salary reduction and a review of the bonus system.
Union leaders had previously announced plans that included a 10% reduction in salaries, as well as the closure of at least three plants in the main economy of Europe. The latest proposals put forward by Volkswagen have been considered a "small step forward" by Daniela Cavallo, the company's main union leader, who assured that salaries at the company will remain competitive even after the cuts.
Volkswagen's shares fell by up to 1.2% shortly after the regular session began in Frankfurt, accumulating a decline of 20% so far this year. Hours before the start of the negotiations, the company reported its least profitable quarter in years, highlighting the need to adopt drastic measures in Germany.
Meiswinkel stated that the company's salary demands are crucial for progressing discussions about the factories and jobs, and emphasized the importance of finding solutions to meet financial objectives and ensure job security at the German sites.
Volkswagen's proposals are expected to initiate more detailed negotiations, with the next round scheduled for November 21. The VW brand, which will experience the majority of the cuts, recorded an operating margin of only 2.1% in the first nine months of the year. Analysts have raised doubts about the effectiveness of cost-cutting plans in Germany.
Meanwhile, the IG Metall union has been calling for salary increases, but Meiswinkel argued that reductions are necessary to improve the brand's profitability. Volkswagen and union leaders warned that plant closures remain a possibility if a satisfactory agreement is not reached.
As the end of a grace period approaches at the end of next month, warning strikes could occur starting December 1 if no progress is made in the negotiations.