Volkswagen rejects labour demands for pay hikes at German plants

German auto giant Volkswagen has rejected union demands for pay increases and instead threatened cost cuts during initial collective bargaining negotiations with labour leaders on Wednesday.

Labour leaders said VW bosses also refused to provide more details about possible mass layoffs and plant closures that have been threatened by VW management as part of austerity efforts in recent weeks.

"Instead of cost burdens, we need cost relief," said VW's head of human resources, Arne Meiswinkel, who is acting as lead negotiator for management. "This will also require a contribution from the employees."

The IG Metall trade union, which represents much of VW's workforce, the company's demands amount to threats of pay cuts for workers at the company.

IG Metall is demanding a 7% wage increase at both VW and across the entire German auto industry.

The talks on Wednesday lasted about three hours. Further meetings have not yet been scheduled, but the lead negotiator for the trade union said he hoped further talks would take place before the end of November.