Volkswagen workers to stage warning strikes early as next week

Volkswagen workers are expected to go on strike in Germany as early as Monday over proposed wage cuts and factory closures.

Driving the news: The IG Metall union, which represents most of Volkswagen’s German workforce, said on Friday that strikes would be “necessary from the beginning of December” in a notice to its members.

• In the letter, the organization noted that a no-walkout agreement between Volkswagen and IG Metall would end on Nov. 30, making strikes possible.

• According to Reuters, people familiar with the matter expect temporary “warning strikes” to start early next week. Longer, wide-spread walkouts are possible depending on the company’s response.

Zooming in: The notice comes 10 days before IG Metall is set to meet with Volkswagen leadership to resume discussions over the company’s cost-cutting plans and form a new labor agreement.

• Following a 48% profit decline in Q3, the automaker has called for plant closures in Germany and a 10% wage cut. The closures would mark the first shutdowns by Volkswagen in its home country since the brand’s founding.

• But the union has pledged to fight any plan that fails to keep every Volkswagen factory operational. IG Metall instead hopes to cut costs by lowering working hours and ending bonuses.

Looking ahead: Should warning strikes lead to widespread walkouts, the automaker is likely to see an immediate impact on sales, which are already on the decline. Although U.S. consumers and dealers will likely be protected from any major disruptions thanks to the company’s facility in Tennessee, Volkswagen’s American workers are now represented by the United Auto Workers (UAW) union after voting to join earlier this year. The UAW is currently negotiating a new labor contract with the brand.

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