German VW Workers Go on 'Warning' Strike

Volkswagen workers launched rolling two-hour strikes Monday at nine plants across Germany to underscore their resistance to pay cuts and factory closures the company says are necessary to cope with a slack European auto market. The work stoppages included the company's base plant at Wolfsburg, where workers rallied against a cost-cutting drive by the automaker's management that threatens the company's first plant closures in its home country. Volkswagen argues that it must lower costs in Germany to levels achieved by competitors and Volkswagen plants in eastern Europe and South America, reports the AP.

Chief employee representative Daniela Cavallo has said employees should not shoulder the burden of management failures to develop attractive products and come up with a cheaper, entry-level electric vehicle. "We demand that all make their contribution—management and the shareholder side as well," Cavallo said at the rally in Wolfsburg as employees drummed, whistled, and clapped. She said the next round of talks in a week's time "is likely to set the course—rapprochement or escalation. We are ready for both."

The so-called warning strikes, a common tactic in German wage negotiations, are taking place as part of talks for a new labor agreement after a mandatory peace period that barred strikes expired on Sunday. The IG Metall industrial union said any job actions beyond those occurring on Monday would be announced later. The company is demanding a 10% pay cut for 120,000 German workers and has said it can't avoid shedding factory capacity that is no longer needed. It has proposed closing three of its German plants.

story continues below

Thorsten Gröger, the regional leader of the IG Metall industrial union in Lower Saxony, where Volkswagen is headquartered, said that the company won't be able to "overlook" the walkouts. "If necessary, this will be one of the toughest conflicts Volkswagen has ever seen." The company is facing sagging demand in Europe, higher costs, and increasing competition from Chinese automakers. Volkswagen built factories to supply a European car market of 16 million in annual sales, but now faces demand for around 14 million. Because Volkswagen has a quarter of the market, that represents a loss of 500,000 cars a year. (More Volkswagen stories.)