STORY: Volkswagen workers offered to support $1.6 billion in cost savings on Wednesday (November 20).

But that’s only if the automaker rules out closing plants in its home German market.

They further warned VW would face a historic battle if it pushed on with major cuts.

The proposal comes a day ahead of a third round of key talks between workers and management.

They’re due to discuss pay cuts and factory shutdowns in Germany.

It comes as Europe’s biggest automaker struggles with high costs and Chinese competition.

The leading IG Metall union said Wednesday’s offer was dependent on stakeholders pitching in.

That includes VW’s controlling Porsche and Piech families.

Reuters saw an internal VW memo from one board member.

It said management welcomed that unions were open to tackling labor costs and capacity, but they added factory closures couldn’t be ruled out.

Any factory closure would be a first for Germany in the group’s 87-year history.

The union’s proposal included forgoing bonuses for next year and 2026, among other savings.

On Wednesday, works council chief Daniela Cavallo said it was not blind to the market changes.

But she added overcapacity could be tackled without shedding jobs.

Strikes at the majority of the carmaker’s German sites are possible from December 1.

The company has said deep cuts at its core VW brand are needed to make it fit for the future.

VW rival Ford also showed on Wednesday the struggles that carmakers face in Europe.

The U.S. giant said it would shed around 14% of its European workforce.

It blamed major losses in recent years made worse by weak demand for EVs, and rising competition.

It said the 4,000 job losses would be mostly in Germany and the UK.