Volkswagen CEO clashes with workers as conflict over closures, pay deepens

Volkswagen's CEO and labour boss clashed during a staff meeting on Wednesday, with management pushing for major cuts while workers warned of more strikes as long as plant closures remain part of wage negotiations at the embattled German automaker.

The gathering of around 20,000 workers at Volkswagen's main plant in Wolfsburg was also attended by German Labour Minister Hubertus Heil and comes less than a week before both sides will meet for a fourth round of talks on Dec. 9.

Volkswagen insists that plant closures and pay cuts are needed in Germany to respond to Chinese competition, something workers have described as red lines while threatening further strikes after a first round of walk-outs earlier this week.


"The current situation is serious. New competitors are entering the market with unprecedented force. The price pressure is immense," Volkswagen Group CEO Oliver Blume said.

He said the group had to work its way back in China, its single biggest market and a stable earnings contributor until recently, adding labour costs in Germany were too high to compete.

"We therefore urgently need to take measures to secure the future of Volkswagen. Our plans for this are on the table."

Daniela Cavallo, who leads Volkswagen's labour council and has repeatedly criticised Blume for not getting involved enough in the conflict, said that all sides, including management and shareholders, had to make sacrifices.

Cavallo said unions remained committed to trying to get a deal done before Christmas.

"That will mean compromises. Concessions too. Things that you don't like and that sometimes hurt you one way or another. But that has to apply to all sides," she said. "Otherwise it's not a compromise."