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Reuters reports that Volkswagen has begun a third round of wage talks on Tuesday. The company also criticised growing protests from workers against a plan to cut labour costs dramatically as illegal.

German metalworkers union IG Metall is calling for extensive job guarantees and four percent more pay for the 103,000 people working at VW’s six western German plants, countering management demands for a two-year freeze in wages.

In an unusual move highlighting the difficulties Europe’s largest carmaker faces, VW has threatened to cut more than 30,000 jobs to achieve two billion euros in personnel cost cuts by 2011, Reuters said.

The company is facing weaker profits due to adverse currency movements as well as weak demand in its core markets of Germany, the United States and China. The company has forced the company to cut its 2004 operating profit forecast by 600 million euros to 1.9 billion.

In an interview with the company’s monthly employee newsletter, the head of VW’s main factory in Wolfsburg said that though the plant has a daily production capacity of 3,200 cars, only some 2,100 Golf and Bora compacts were being built every day.

Reuters reported that some 7,500 workers at VW’s Emden and Kassel plants protested on Monday, according to IG Metall, up from the roughly 1,000 who had demonstrated during the last round earlier this month.