It is likely that negotiations between Volkswagen AG and union leaders will continue into 2025, denying CEO Oliver Blume a fresh start he seeks to turn around the crisis at the largest European car manufacturer. The management is entering its fifth round of negotiations with the powerful IG Metall union, while both sides remain at an impasse over how to reduce the costs of this car manufacturer to become more competitive in the market, Bloomberg reports.
Both sides aim to reach an agreement by Christmas, but they still need to bridge deep divides over potential layoffs and factory closures in Germany. Volkswagen is struggling with declining demand for electric vehicles in Europe and increasing competition in China from local manufacturers led by BYD.
Blume appeared on Tuesday at Tongji University in Shanghai to mark VW’s 40th anniversary in the country. He told a group of students that the car manufacturer will continue its strategy of “in China, for China,” which prioritizes local technology and cost competitiveness.
– This year has been very challenging for the Volkswagen group. Our plan is to bring more than 30 new models to market by 2030. We will use a strong product portfolio to allow our customers to see the charm of the Volkswagen brand again – said Blume.
Two days of negotiations are planned, but if they do not yield progress, the IG Metall board is ready to hold a vote at the end of the week to pave the way for potential strikes in January. Tens of thousands of VW workers held two strikes this month after disagreements with management over dividend cuts and reductions in some bonuses.
On Friday, Volkswagen informed Porsche Automobil Holding SE that it no longer expects to complete its corporate planning by December 31. This forces Porsche to use analysts’ assumptions to conduct impairment testing of its investment in the car manufacturer. Porsche SE stated that it expects a negative non-cash impairment of between 7 billion euros (7.3 billion dollars) and 20 billion euros on the carrying value of its investment in Volkswagen.
