A German union warned of a potential conflict with Volkswagen after the carmaker said Wednesday that it plans to terminate a number of wage agreements. The group, which houses a vast stable of brands that includes VW, Audi and Porsche, has been working on a broad cost-cutting plan throughout 2025 and 2026 following an agreement with its powerful unions that included 50,000 job cuts in Germany by 2030 and billions of euros a year in cost savings.

But the German automaker recently conceded that the agreed plan wouldn’t be enough, warning that it needed to do more in its fight against mounting industry headwinds to remain competitive. A fresh deal with unions agreed earlier this month will see a further 50,000 jobs go, on top of a halving of its model lineup.

In a statement Wednesday, the IG Metall union said it met with Volkswagen management to discuss progress of the original cost-cutting plan, a meeting that Volkswagen used to announce its intention to terminate several wage agreements at the end of the year, according to the union. "The board is now conflating two separate issues: the negotiations concerning the contractual commitments from 2024 and demands for the current round of collective bargaining for 2026/2027, which is only just beginning," IG Metall said.

Volkswagen said it is giving formal notice to terminate several collective agreements, effective Dec. 31, as it needs to adjust some of the terms, given "enormous pressure on prices and significantly intensified competition" in the auto industry. "We will not accept this," IG Metall chief negotiator Thorsten Groger said. "Anyone who wants to pick the pockets of the employees must expect a corresponding confrontation." The two sides have agreed to meet for further talks in the second half of October.