Volkswagen Stock: Labor Strikes Threaten Amid Profit Plunge

Volkswagen faces a critical juncture as its third-quarter profits nosedived by nearly 50 percent, while revenue declined by 6 percent to €145.4 billion. The automotive giant's profit margin has contracted to 3.6 percent, positioning it at twelfth place among global automotive manufacturers. This financial downturn is particularly evident in the Chinese market, where vehicle sales have plummeted by 17 percent. Adding to these challenges, the IG Metall union has announced comprehensive warning strikes across all Volkswagen facilities, responding to the company's extensive cost-cutting proposals that include potential 10 percent wage reductions.

Restructuring Plans Under Union Pressure

The automaker's restructuring strategy has identified at least three plants for potential closure, affecting thousands of jobs. This decision stems from a production shortfall of approximately 500,000 vehicles needed for optimal plant utilization. While facilities in Dresden and Osnabrück face particular scrutiny, the IG Metall union has proposed an alternative cost-reduction plan targeting €1.5 billion in savings. Simultaneously, Volkswagen has increased its research and development investment by 12 percent to €8.3 billion, aiming to maintain technological competitiveness amid growing pressure from Chinese competitors and sluggish electric vehicle demand.