By Victoria Waldersee
BERLIN (Reuters) -Volkswagen and German unions will most likely either reach a deal in the early hours of Wednesday or adjourn until the new year, a source familiar with discussions said on Tuesday, as the two sides strive to reach a cost-cutting pact before Christmas.
After a 13-hour negotiation round on Monday ending after midnight, talks are expected to stretch even further into the early hours of Wednesday, the source said, declining to be named because discussions are private.
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Both Volkswagen and labour leaders have expressed a keen interest in a deal this year, but they remain far apart on key issues, including the possibility of plant closures, which labour representatives adamantly oppose but which the carmaker insists it cannot rule out.
If no deal is reached, labour leaders have threatened to escalate strike action in the new year. With the support of the union’s board, which would meet on Friday if talks collapse, worker representatives at each plant could vote for 24-hour or open-ended strikes in January.
Around 100,000 workers have already downed tools for several hours on two separate occasions in the past month in the largest strikes ever seen at the carmaker, protesting against management plans to slash wages, cut capacity and potentially shut German plants for the first time in the company’s history.
More of these shorter stoppages, called “warning strikes”, could also take place, with a union spokesperson saying nothing would be decided until talks had run their course this week.
Europe’s biggest automaker is struggling with falling demand, rising costs and cheap competition from China.
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 ended the formerly peaceful relationship between works council chief Daniela Cavallo and Chief Executive Oliver Blume, from dragging into next year.
The talks are now most likely to end in the early hours of Wednesday, the source said, though the outcome remained unclear.
“Workers don’t want to go into Christmas in fear,” Cavallo told union members before talks began early on Monday, the fifth round since early September.
(Reporting by Victoria Waldersee. Editing by Rachel More and Mark Potter)
