Volkswagen management and labour representatives will resume high pressure talks this morning over planned cost cuts to the carmaker's German sites after a 13-hour negotiation round yesterday failed to produce an agreement.
Unions said late last night that it was still "far from clear" whether today's talks would bring the two sides closer to one another or reach a stalemate, with unions adamant that any solution must exclude plant closures and the carmaker insisting it cannot rule them out.
Both sides had expected the talks to last several days in a last-ditch attempt to reach an agreement before Christmas and avoid the conflict, which erupted the formerly peaceful relationship between works council chief Daniela Cavallo and chief executive Oliver Blume, from dragging into next year.
Unions have threatened unprecedented strike action in the new year if a deal is not reached this week.
"Workers don't want to go into Christmas in fear," works council chief Daniela Cavallo told union members outside the hotel before talks began yesterday, the fifth round since early September.
Unions have threatened unprecedented strike action in the new year if a compromise is not found in this week's talks, which both sides have said could last several days.
Europe's biggest carmakers are being squeezed by high costs and the arrival of cheaper Chinese competitors which are taking the battle for market share to their home turf.
Unions blame poor decisions by management for Volkswagen's malaise, from the diesel emissions scandal to not investing earlier in affordable EV technology.
Volkswagen, Europe's biggest carmaker, has seen its share price fall by more than a third over the past 12 months, reflecting the sprawling German group's difficulties in tackling rising rivals and a slowdown in EV demand.
The carmaker, like others across Europe, is struggling with overcapacity in high-cost markets squeezing margins and persistently lower sales.
VW has said it does not expect car sales, down by around 2 million in Europe since the pandemic, to fully recover, and it must adapt.
More than 100,000 staff at nine plants across Germany downed tools last week in the largest strikes at the carmaker, protesting against management's stance that wages must be cut and capacity downsized for the VW brand to stay competitive.
In a sign of the depth of Volkswagen's problems, its top shareholder Porsche on Friday said it may have to write down the value of its 31.9% stake by as much as €20 billion.
This is mainly due to the delay in Volkswagen's annual planning round as a direct consequence of the prolonged talks with unions, Stifel analysts said in a note.
Such a writedown would still assume a book value for Volkswagen shares that is more than twice as high as its current market price, they added.
Shares in Porsche SE, which serves as the investment vehicle of the Porsche and Piech families and also holds a 12.5% stake in the namesake carmaker, were down 2.9%.
