The company's financial results have been adversely affected by higher fixed costs and restructuring provisions, highlighting the urgent need for significant cost reductions.

Lower Saxony's Economic Minister Olaf Lies highlighted the importance of collaboration among all parties to avoid drastic measures like layoffs and plant closures.

Cavallo warned that without viable solutions from the company, the situation could escalate, emphasizing the workforce's readiness to fight for their jobs.

The proposed savings aim to fund a future plan to prevent plant closures by financing reduced working hours at underutilized sites, rather than implementing blanket reductions.

In a bid to prevent plant closures and layoffs, IG Metall and the works council at Volkswagen have proposed cost reductions through salary concessions.

More than 7,000 employees gathered at Volkswagen's headquarters in Wolfsburg on November 21, 2024, to protest ahead of the third round of negotiations for a new collective agreement.

Union chairperson Daniela Cavallo emphasized the urgency of reaching an agreement, warning that the threat of strikes could materialize starting December 1, 2024, if negotiations fail.

Cavallo argued for the necessity of investing during challenging times to foster future innovations and improve production capacity, rather than resorting to indiscriminate cost-cutting.

She stressed that regaining technological leadership, enhancing software, and ensuring timely product launches are critical for Volkswagen's success.

Cavallo called for a streamlined management model focused on the Volkswagen brand, advocating for the reduction of complexity and redundancy within the company.

While the union is open to workforce reductions, they insist that any cuts must be socially responsible and not detrimental to employees.

Experts have praised the unions' proposal as a significant step toward consensus, suggesting that all stakeholders, including management, must contribute to the solution.