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Volkswagen's plans to close factories and cut costs have sparked significant unrest among workers and unions, leading to potential strikes and a historic labor dispute.

Volkswagen AG, Europe's largest carmaker, is facing significant backlash from its workforce and unions over plans to close several factories and implement substantial cost cuts. The proposed measures, which include shutting down plants and laying off thousands of employees, have been met with strong opposition from the company's works council and the IG Metall union.

The conflict has escalated as Volkswagen's management and labor representatives prepare for a crucial third round of negotiations. Daniela Cavallo, head of the works council, has criticized the company's proposals, stating they cross several "red lines" and are unacceptable. She has urged Volkswagen to devise a plan that secures the future of all its sites.

Unions have threatened a historic labor battle if Volkswagen proceeds with its current plans. Thorsten Groeger, leading the negotiations for IG Metall, warned of a conflict "the likes of which this republic has not seen for decades," with potential strikes at most of Volkswagen's German sites starting December 1. The union has proposed concessions worth 1.5 billion euros in savings but insists that plant closures must be ruled out.

Volkswagen argues that deep cuts are necessary to remain competitive amid high costs in Germany and increasing pressure from cheaper Asian competitors. The company has asked for a 10% pay cut and has not excluded the possibility of plant closures in its scenarios presented to labor representatives.

The situation is further complicated by the involvement of Volkswagen's controlling families, the Porsches and Piechs, who unions believe should also contribute to the cost-saving efforts. As the negotiations continue, the outcome remains uncertain, with both sides preparing for a potential escalation in the dispute.

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