Volkswagen's Christmas Crunch: Unions and Management Clash Over Cost Cuts

Negotiations between Volkswagen management and labor unions extended into the night without a resolution. Unions oppose plant closures, warning of strikes if a compromise isn't found. The company faces financial woes from harsh competition and past missteps, with potentially significant investments at stake.

Volkswagen management and labor representatives engaged in protracted negotiations on Monday night regarding cost cuts, with no resolution achieved. Discussions concluded after approximately 13 hours early Tuesday, merely to resume later that morning, according to an IG Metall union spokesperson.

The parties remain divided on critical issues, notably plant closures, with unions firmly against them while the carmaker keeps the option open. The IG Metall union expressed uncertainty over whether the talks on Tuesday would lead to progress or deadlock.

Facing strong competition from cheaper Chinese rivals and internal missteps such as the diesel emissions scandal, Volkswagen's financial struggles are compounded by overcapacity and lower sales. Unions threaten strikes if talks fail, as shareholder Porsche SE considers a significant stake writedown.

(With inputs from agencies.)