German automaker Volkswagen rejected trade union demands for pay increases for German workers and continued to warn of deep cuts instead during initial collective bargaining talks on Wednesday.
VW earlier this month cancelled a long-standing job security deal with workers and warned that it could no longer rule out mass layoffs or plant closures as part of an austerity plan at the auto brand.
"Future instead of cutbacks" could be read on one banner. The crowd jeered VW management's plans with loud boos and chants.
The possibility of cuts and shutdowns has raised the stakes for collective bargaining talks between VW management and the IG Metall trade union, which represents much of the workforce at VW, Europe's largest automaker.
Labour leaders demanded concrete details from company management about the austerity plans, including what plants might be targeted for closure or how many jobs could be at risk.
Several thousand VW employees protested in front of the building in Hanover where negotiations took place. The workers used drums, sirens and whistles to denounce cost-cutting plans the core VW brand, and flares occasionally filled the air with red smoke.
The IG Metall trade union has demanded 7% pay increases for workers at VW and across the German auto industry, citing in part healthy profits at VW's parent company, the Volkswagen Group.
But management on Wednesday flatly rejected that demand, and instead hinted at layoffs or possible pay cuts for workers.
"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."
"Plant closures and mass redundancies are not on the table with us," said Thorsten Gröger, chief negotiator for IG Metall in the German state of Lower Saxony, which includes VW's headquarters in the city of Wolfsburg and many of the company's biggest factories.
The collective bargaining round, originally planned for the end of October, was moved forward after VW tightened its austerity measures at the beginning of this month.
Instead of just discussing pay, negotiations are also to be held on job security. Initially, only the approximately 120,000 employees in the six large western German plants covered by the VW in-house wage agreement will be affected.
VW apprentice Josi Gross was among the many workers who joined the demonstration on Wednesday. Gross, 23, told dpa that she is particularly worried about her job prospects at the automaker.
VW management also recently terminated a long-standing deal that guaranteed employment for apprentices at the company. But Gross is confidentr the union will succeed.
"I think IG Metall will do it," she said.
Separate collective bargaining deals apply at VW's plants in the eastern German state of Saxony. VW also terminated the job security agreement there on Tuesday.
The company has so far not provided any concrete details about the proposed cuts, and again refused to do so on Wednesday when pressed by labour negotiators.
"So far, we have only been left in the dark," he said. "You don't build a future with fear - you destroy the future with fear."
Moreover, according to Gröger, the union's chief negotiator, VW's parent company, the Volkswagen Group, had recently reported solid profit figures and had paid out high dividends to shareholders.
This shows that there is room to manoeuvre, Gröger said, and the union would be sticking to its demand for a 7% wage increase for VW workers.
He also warned that workers are prepared to mount "fierce resistance" if the company presses forward with cuts.
"We are only at the beginning of a dispute with the company that is going to be tough," he said, adding that strikes could come any time after December 1.
"If necessary, tens of thousands will stand outside the factory gates and on the streets at Volkswagen sites," he said.
VW management, however, reaffirmed its austerity course. The company has cited difficulties in transitioning to electric vehicles and the need to face stiff competition from other global automakers.
"We have to restructure our company together. The situation is serious," said Meiswinkel, the VW representative. "The task now is to find viable solutions."
Daniela Cavallo, head of the influential works council at Volkswagen, acknowledged the challenges facing the company but criticized management's handling of the situation.
"The equal importance of job security and profitability is non-negotiable," she said. "Of course, we currently have serious problems on the profitability side. But you can't solve them by using plant closures as a threat."
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