Volkswagen's main union has rejected plant closures or job cuts in Germany as a way the carmaker to slash manufacturing costs and shore up its global competitiveness.
A day after VW floated the idea of thinning its workforce, the IG Metall metalworkers union refused to budge on last year's pact that froze wages in western Germany until early 2007 in return for job security through 2011.
"Closing Volkswagen AG plants is not an issue for IG Metall under any circumstances," said Hartmut Meine, head of the union in the German states of Lower Saxony and Saxony-Anhalt.
He acknowledged concerns about developments at the carmaker.
"However, last November's wage agreement sets very tight limits on thoughts of solving problems by reducing staff," he said in a statement, noting that the deal ruled out forced layoffs for the roughly 100,000 workers covered by the pact. Volkswagen is trying to make its European operations efficient enough that it can make money by exporting cars to the Americas and to growth markets in Asia even amid chronic dollar weakness. Volkswagen stock, which rallied more than 40 per cent since early May to a high above €45 in late July, fell 1.6 per cent to €43.21.