VW and unions strive for job deal

By Theo Leggett
Europe business reporter, BBC News

Volkswagen's workers have voiced concerns at home and abroad

Volkswagen, Europe's biggest carmaker, is meeting union officials for talks which experts say could prove vital to its future.

The company wants its German employees to accept a big increase in working hours without increasing their pay.

Negotiations between the firm, workers and trade unions have proved difficult.

Workers and the trade union IG Metall want guarantees that jobs will be safeguarded at Volkswagen's plants in western Germany.

Restructuring

The talks come as Volkswagen wrestles with a serious problem.

Although Volkswagen's cars are proving popular and sales are very strong, its profit margins are being squeezed by high production costs, particularly in its west German heartlands.

Earlier this year, Volkswagen chief executive Bernd Pischetsreider introduced a major cost-cutting drive which could ultimately lead to as many as 20,000 jobs being shed.

So far, the company has said that more than 13,000 employees have taken voluntary redundancy or agreed to retire early.

But the company also wants remaining employees to accept an increase in their working week from 29 to 35 hours, without a significant increase in their pay.

Workers representatives have suggested that they could make concessions, but only if the company promises to build important new models at its German plants, and offers guarantees of job security.

People within the company say Friday's talks in Hannover are unlikely to result in a formal agreement. But they are expected to pave the way for further negotiations which could lead to a deal before the end of the year.