HANOVER, Germany -- Volkswagen began a third round of wage talks on Tuesday, slamming as "illegal" growing protests from workers against a plan to cut labor costs dramatically.
German metalworkers union IG Metall is calling for extensive job guarantees and 4 percent more pay for the 103,000 people working at VW's six western German plants, countering management demands for a two-year freeze in wages.
In an unusual move highlighting the difficulties Europe's largest carmaker faces, VW has threatened to cut more than 30,000 jobs to achieve 2 billion euros ($2.48 billion) in personnel cost cuts by 2011.
The cuts are vital as it battles currency headwinds and weak demand in its core markets of Germany, the United States and China that forced the company to cut its 2004 operating profit forecast by 600 million euros to 1.9 billion.
In an interview with the company's monthly employee newsletter, the head of VW's main factory in Wolfsburg said that though the plant has a daily production capacity of 3,200 cars, only some 2,100 Golf and Bora compacts were being built every day.
"The best paid auto workers with the shortest working hours in the company have to generate the best productivity and quality again," Dietmar Korzekwa told VW's "Autogramm", adding that he plans to cut investments at the plant to 1.5 billion euros for the next five years from the 1.96 billion agreed last year for the time period of 2004 to 2008.
Some 7,500 workers at VW's Emden and Kassel plants protested on Monday, according to IG Metall, up from the roughly 1,000 who had demonstrated during the last round earlier this month.
The trade union is expecting 4,000 workers to pile on the pressure with protests on Tuesday outside of the Congress Centre in Hanover, where the two sides are meeting.
VW's top negotiator Josef-Fidelis Senn criticised the protests sharply, calling it "not only improper, but also illegal" since the two parties had agreed on keeping the peace until the end of October.
IG Metall resumes the talks on a day on which papers in Europe said that over 6,000 workers at General Motors' German unit Opel might lose their jobs as GM tries to end losses in Europe.
Nevertheless, the union's top representative said that he expected "clear signals" during the fresh round of talks that VW would guarantee jobs at the six plants, adding the time for concrete negotiations had begun.
While VW CEO Bernd Pischetsrieder has repeatedly said the company aims to keep jobs in Germany, he has not shown any signs of compromise despite union threats of a strike.
"Management won't prevent a strike at the price of not changing things that need to be changed," he told a German newspaper last week, referring to wages that are often 20 percent higher than those at German rivals. "Our personnel costs have to be adjusted to a competitive level."