Volkswagen Profit Shrinks as Unions Threaten Strike

Volkswagen reported a 42 percent drop in quarterly profit on Wednesday, while emphasizing an “urgent need” to cut costs and gain efficiency in a challenging marketplace as it considers plant closures and layoffs in Germany.

The automaker’s negotiator pointed to the company’s weak earnings ahead of his meeting with union leaders, who warned of imminent strikes if a solution to cut costs and restructure the brand was not found.

The Volkswagen Group, which owns 10 brands, including Audi and Porsche, is Germany’s largest industrial employer, with 120,000 people working for its eponymous core brand. The country’s vision of itself as an economic powerhouse and automotive giant is also deeply intertwined with Volkswagen, and local economies across the country depend on the company and its well-paid workers.

Representatives from the automaker and IG Metall, the union representing most of its workers, convened for a second round of wage negotiations on Wednesday in a conference room in the Volkswagen Arena, the stadium of the company’s professional soccer team, VfL Wolfsburg.

After roughly seven hours of talks, Arne Meiswinkel, the chief of personnel at Volkswagen, who is leading negotiations for the company, told reporters that the company was seeking 10 percent pay cuts and reductions in bonuses. In exchange, he floated the prospect of discussing keeping all 10 factories in Germany open.

“To achieve this financial goal, we can also imagine discussing the prospects for securing the locations and employment,” Mr. Meiswinkel said.