By Victoria Waldersee and Christina Amann
HANOVER, Germany (Reuters) -Crunch talks between Volkswagen and unions over cuts to the automaker’s German operations continued on Wednesday and are expected to last into the night, reflecting intense efforts to strike a deal before Christmas and avert major strikes in 2025.
Earlier in the day, both sides had taken a brief break after 36 hours of negotiations which began on Monday, seeking to end a bitter standoff over potential factory closures and mass layoffs that has thrown Europe’s top carmaker into its biggest crisis in years.
An agreement before Christmas is possible, a person familiar with the negotiations said, while cautioning that the complexity of the talks, which initially kicked off in late September, meant there is no guarantee of a compromise.
Germany’s IG Metall union, which has vowed fierce resistance to any plant closures and staff cuts, said it would provide an update depending on any new developments, adding it was currently not clear when that would be the case.
The two sides have been trading blows over what Volkswagen says are necessary cost cuts to be able to compete with more agile and cheaper Asian rivals, all while an expected transition to electric vehicles has lost momentum.
Both have stuck to their red lines, with unions opposed to any plant closures, while VW does not rule them out, citing a shrinking European market and the need to cut overcapacity.
Germany’s most powerful union hopes for an agreement this week to give workers peace of mind before Christmas, threatening to escalate strikes in the new year if no deal is struck.
The crisis at Volkswagen has already spilled over to its investors, with top shareholder Porsche SE last week warning of potential impairments of up to 20 billion euros ($21 billion) on its 31.9% stake in the carmaker.
Porsche SE, which is majority-owned by the Porsche and Piech families and holds the majority of voting rights in Volkswagen, is backing VW “to push for tough cuts”, CEO Hans Dieter Poetsch said in a statement on Monday at the start of the latest round of talks.
“We are convinced that VW is able to rightsize its business and that it will prevail in this challenging competitive environment,” Poetsch, who also serves as Volkswagen’s supervisory board chairman, said at the time.
The Financial Times earlier reported that the Porsche and Piech families were pushing for plant closures in the ongoing negotiations.
($1 = 0.9531 euros)
(Reporting by Victoria Waldersee and Christina Amann; Writing by Christoph Steitz; Editing by Rachel More, Matthias Williams and Jan Harvey)
