“There are no more checks coming from China,” CEO Oliver Blume told workers at the meeting.
In the first half of this year, Volkswagen’s sales in China declined almost 20 percent.
The dropoff in Chinese revenue leaves Volkswagen with few options to make up for its monetary shortfall, making the plant closures an obvious choice. VW will need to put a firm proposal in front of union workers to kickstart any negotiations.
Meanwhile, separate negotiations are already underway. Collective bargaining for metal and electrical workers began with union IG Metall announcing in July that workers want a 7 percent pay increase to make up for rising inflation.
Volkswagen’s Sept. 4 meeting was the company “putting its cards on the table” and could be used as leverage in future negotiations with union workers, analyst Schmidt said. With the prospect of plant closures and job losses on the table, the automotive manufacturer could use the threat to reduce pay increases and other demands.
But should the collective bargaining negotiations break down, IG Metall has warned that workers could go on strike starting Oct. 29.
It’s going to be a bumpy fall.