Volkswagen CEO Urges Unions to Help Slash Costs Amid Looming Plant Closures

Volkswagen's CEO calls on labour unions to suggest cost-cutting measures ahead of crucial talks on plant closures and new wage deals. The carmaker recently canceled job security schemes and now faces union resistance. Discussions will focus on finding savings without job cuts. Labour costs in Germany are a key issue.

Volkswagen's CEO Oliver Blume is urging labour unions to present proposals on cost-cutting measures to close the gap with international competitors, just days before critical talks on potential plant closures and new wage agreements.

Europe's leading carmaker had earlier scrapped long-held job security schemes and is contemplating plant closures in Germany for the first time, sparking fierce resistance from unions. Talks about new wage agreements and future budgets have been brought forward by a month to September 25 amid the escalating tensions.

Blume indicated that Germany’s labour costs were double the European average and stressed the need for a broad deal on investments and labour agreements within the year. The comments preceded a virtual meeting with German Economy Minister Robert Habeck to discuss the auto industry's health. This comes as BMW and Mercedes-Benz have issued profit warnings due to a weakening Chinese car market.