By Victoria Waldersee
HANOVER, Germany (Reuters) -Volkswagen management and labour representatives negotiated late into the night on Monday in a last-ditch round of talks on cost cuts before Christmas, with unions saying it remained far from clear whether compromise would be reached.
Talks ended after around 13 hours of negotiation in the early hours on Tuesday without a deal but would resume mid-morning, a spokesperson for IG Metall union said.
The sides were far apart on key points, with unions adamant that any solution must exclude plant closures and the carmaker insisting it cannot rule them out.
“It was far from clear late on Monday evening whether rapprochement or a stalemate were a realistic outcome of the talks on Tuesday,” the IG Metall union said in a statement published to its website.
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.
“Workers don’t want to go into Christmas in fear,” she told union members outside the hotel before talks began early on Monday, the fifth round since early September.
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 SE on Friday said it may have to write down the value of its 31.9% stake by as much as 20 billion euros ($21 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%.
($1 = 0.9527 euros)
(Reporting by Victoria Waldersee; Additional reporting by Christoph Steitz; Writing by Rachel More, Editing by Andrey Sychev; Editing by Kirsten Donovan, Alexander Smith and David Gregorio)
