In the darkest moment! Volkswagen labor negotiations started today after the closure of the German factory was exposed

"Earthquake" in German Manufacturing Industry? Volkswagen Sparks Labor Dispute Again After Plant Closure Plan.

Today, Volkswagen officially initiated key negotiations with the labor union IG Metall. The union strongly opposes plant closures and demands the company to defend employee rights.

Earlier this month, it was reported by the media that due to cost pressures, Volkswagen is considering closing its factories in Germany for the first time and abolishing wage agreements to further reduce expenses.

The market is concerned about whether the two sides can reach an agreement in the negotiations, as this is crucial for the future development of Volkswagen. If the negotiations fail, the union may take actions such as strikes, which would have a huge impact on Volkswagen and even the German manufacturing industry.

Volkswagen Engages in Intense Negotiations with Union, Job Security in Focus

On Wednesday, a confrontation between Volkswagen's union and company executives took place, with a focus on job security and plant closures.

Facing high costs and intense competition, Volkswagen is confronted with serious challenges. Previously, Volkswagen had indicated the possibility of closing German factories for the first time, including a large car manufacturing plant and a component factory, and may also attempt to terminate the agreement with the union that guarantees job security until 2029.

Volkswagen CEO Oliver Blume stated:

"The environment has become more challenging, with new competitors entering Europe, and Germany is falling increasingly behind in competitiveness."

Meanwhile, the IG Metall union strongly opposes plant closures and aims to protect employee rights. Union chairperson Daniela Cavallo will speak on behalf of the employees, vowing to defend their jobs.

According to sources cited by MSN News, Cavallo is known for her patience and persistence, and is described as "equally tough in business dealings."

In a more complex situation, IG Metall also needs to negotiate new labor agreements for the 130,000 workers employed by Volkswagen's core brand. Since the mid-1990s, this agreement has been protecting job positions at six major production plants in western Germany.

During Cavallo's tenure, this may be her most controversial labor negotiation. The tension between the union and management is becoming more apparent, with all eyes on the progress of the negotiations and their profound impact on the German automotive industry.

Shortly after Volkswagen informed employees of the potential plant closures earlier this month, Cavallo expressed her disappointment, saying:

"Unfortunately, I have to admit that this is the darkest day so far."

Worsening Situation in German Manufacturing Industry, Companies Show Pessimism

Volkswagen insists that given the harsh market conditions and high costs of doing business in Germany, such measures are inevitable.

The company expresses concerns that, with the rising energy and labor costs in Germany, it is at a disadvantage compared to other European competitors. Additionally, the rise of electric vehicles in China has brought significant impact, with car manufacturers actively expanding their market share in the European electric vehicle market This pressure is reflected throughout the entire German automotive industry. Recently, both Mercedes-Benz and BMW have issued profit warnings, facing severe challenges due to poor sales.

German industrial sectors, including giants like BASF and Thyssenkrupp, are also striving to cope with similar challenges. Soaring costs, coupled with labor shortages, have forced several major companies to downsize and even consider partially withdrawing from overseas markets.

According to the PMI data released by S&P Global and Hamburg Commercial Bank (HCOB) on Monday, the plight of German manufacturing has worsened, with customers becoming more cautious and related investments decreasing.

Excluding the initial months of the pandemic, German companies are experiencing the fastest pace of layoffs in 15 years. There is a noticeable pessimism among businesses, including concerns about economic recession, market uncertainty, and the weakness in the automotive and construction industries