Volkswagen Group CEO Oliver Blume has stressed the necessity for urgent measures to reduce labour costs and capacity to secure the company's future.

Addressing approximately 20,000 workers at the Wolfsburg headquarters, Blume acknowledged the progress in streamlining operations and improving car quality but insisted that further steps are essential to remain competitive, according to Reuters.

At the meeting, Blume detailed the challenges faced by Volkswagen, including intense competition, price pressures, and high labour costs.

"We therefore urgently need to take measures to secure the future of Volkswagen. Our plans for this are on the table," Blume was quoted as saying.

The CEO emphasised that the automotive landscape is rapidly changing, with new competitors emerging forcefully.

Despite acknowledging improvements in design and quality, Blume highlighted the need to reduce labour costs and capacity.

The speech, however, was met with disapproval from the workforce, with instances of booing when he mentioned his personal connection to Wolfsburg, undisclosed sources told Reuters.

Blume cited immense price pressure and the necessity for Volkswagen to regain its footing in China, which has been a major source of stable earnings.

Daniela Cavallo, head of Volkswagen's labour council, called for sacrifices from all parties, including management and shareholders, to reach an agreement before Christmas.

She advocated for compromises that would be fair and shared across the board.

The meeting was attended by German Labour Minister Hubertus Heil.

Heil encouraged solutions that would avoid plant closures or forced layoffs, emphasising the need for future investment to bolster Germany's industrial sector.

Union officials have warned that failure to reach an agreement could lead to escalated strike actions, potentially leading to longer or indefinite walkouts.

According to Reuters, the two sides are set to meet for a fourth round of talks on December 9.

This week, nearly 100,000 Volkswagen employees engaged in strikes across Germany, contesting the automaker’s proposals for wage reductions and potential site closures.

IG Metall union has warned of escalating industrial action if the company persists with its current plans.

On 2 December, 98,650 Volkswagen employees from nine plants across Germany participated in a series of walkouts as part of ongoing industrial action.

The strikes involved two-hour stoppages by morning shift workers and early walkouts by evening personnel.

The industrial action followed a 22 November decision by labour representatives at Volkswagen to commence limited strikes starting early December, after wage and plant closure negotiations reached a stalemate.