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VW workers strike as fourth round of talks begin

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Strikes called over wage cuts, German plant closures

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Chancellor Olaf Scholz warned VW against closures

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VW defends cost-cutting

(Adds quotes from union representatives in paragraphs 7-8)

By Victoria Waldersee and Christina Amann

WOLFSBURG, Germany, Dec 9 (Reuters) - Volkswagen

workers said its management had one last chance to

compromise on Monday or risk strikes on a scale not previously

seen next year, as talks were set to begin in a bitter standoff

over wage cuts and plant closures.

VW staff downed tools at nine German sites, while thousands

marched with flags and whistles to a square in Wolfsburg, where

the carmaker is headquartered, to listen to union leaders.

The latest negotiations, which initially kicked off in

September, come as Europe's largest carmaker seeks ways to

radically cut costs in Germany to better compete with cheaper

Asian rivals that have entered its home market.

The VW crisis has hit at a time of uncertainty and political

upheaval in Europe's largest economy, as well as wider turmoil

among the region's automakers. German Chancellor Olaf Scholz,

trailing in polls ahead of a snap election, warned VW against

factory closures over the weekend.

Workers are staging four-hour strikes, the second walkouts

in a week and for twice as long as the two-hour-long strikes

that took place the first time.

Even before talks, union leaders were threatening more

strikes if VW did not move closer to their position, but left

open the possibility of a solution by Christmas.

"Today, the workforce is taking a stand in the form of a

nationwide warning strike. Everywhere, at all locations, in all

shifts, Volkswagen employees are stopping work, not for two

hours as they did last time, but for four hours," union IG

Metall chief negotiator Thorsten Groeger said.

"And if that isn't enough, the New Year's Eve fireworks will

be followed by an escalation that this company has never

experienced before," he said.

Groeger added that management had "one last chance" to get

back on track in 2024, "then we can still find a solution with

great flexibility this week or next week."

Workers, who have dismissed any cuts to wages or plant

closures, can crank up the pressure on VW by eventually staging

24-hour strikes and even open-ended ones.

COST-CUTTING

Volkswagen insists that capacity and wage cuts are needed

because demand for cars in Europe has fallen while costs in

Germany make it impossible to compete with new rivals.

Its chief negotiator Arne Meiswinkel said unions and

management needed to find alternative ways to a solution for its

German plants after rejecting a union proposal as unsustainable.

"We continue to need to reduce costs, reduce overcapacity,"

Meiswinkel said.

CEO Oliver Blume last week defended Volkswagen Group's

decisions as necessary in a fast changing environment, saying

management could not operate "in a fantasy world".

But Groeger urged VW to move towards the union's position.

"Trust has been destroyed... workers are very angry. The

brand VW is under threat of becoming damaged by the behaviour of

the board and the share price has been thrown to the bottom of

the basement. That is the board's responsibility," he said

Volkswagen's stock is among the worst performers among

European carmakers and has fallen by nearly 25% this year.

While the impact of the strikes was not immediately clear,

the union has said several hundred cars were not built at the

Wolfsburg plant alone as a result of the first round.

Automakers face rising competition from China, where EV

maker BYD recently said that between

August and October it hired close to 200,000 new employees in

car and component manufacturing.