San Francisco Frontiers - Thousands to strike at Volkswagen's Germany plants

VW has been hit hard by high manufacturing costs at home, a stuttering shift to electric vehicles and tough competition in key market China. It has announced a plan to cut billions of dollars in costs.

The powerful IG Metall Union and the workers council have fought to protect jobs since VW announced in September that it was weighing the unprecedented step of shutting plants in Germany, where it has around 120,000 employees.

"Warning strikes will begin Monday in all plants," said IG Metall negotiator Thorsten Groeger, announcing short walks-outs after the company had last week rejected the union's proposals for protecting jobs.

"If necessary, this will be the toughest wage dispute Volkswagen has ever seen," Groeger warned in a statement Sunday.

He charged that "Volkswagen has set fire to our collective bargaining agreements" and that the company board is now "throwing open petrol drums into it".

"What follows now is the conflict that Volkswagen brought about -- we did not want it, but we will conduct it as committedly as necessary!"

VW said it "respects workers' rights" and believes in "constructive dialogue" in a bid to reach "a lasting solution that is collectively supported".

It also said that it had taken "measures to guarantee urgent deliveries" during the strike action.

The crisis at the German industrial titan comes as the eurozone's top economy struggles, and amid heightened political uncertainty with elections looming in February.

Volkswagen's perilous financial position was highlighted in October when it reported a 64 percent plunge in third-quarter profits to 1.58 billion euros ($1.7 billion).

Slowing business in China, where homegrown rivals are outselling the German carmaker, has been a particularly heavy blow.

VW cited "economic reasons" last week when it announced the sale of its operations in China's Xinjiang region, though the company had also been under pressure to exit Xinjiang due to human rights concerns.

Further clouding the outlook is an EU move to impose hefty tariffs on Chinese-made electric cars, which VW fears could trigger retaliatory steps.

Its woes reflect a broader crisis in the European auto industry, with demand weak and the transition to electric cars slower than expected.

In Germany, VW, BMW and Mercedes-Benz have all downgraded their profit forecasts recently while key suppliers to the industry have been announcing job cuts.

M.Hill--SFF