Volkswagen (VW) has proposed a 10% reduction in employee wages during team negotiations with the IG Metall trade union, reports OSN Media.

In its respective statement, the German carmaker noted that due to the current economic crisis in the auto industry, it is unable to meet the aforesaid trade union’s demands for a 7% wage increase.

Volkswagen claims the 10% pay cut will enable it to fund future investments needed to remain competitive and save jobs.

Arne Meiswinkel, Volkswagen's chief negotiator, expressed concern about the current situation in the European automobile industry, especially in Germany, stressing that successful operation is a necessary prerequisite for maintaining employment.

The company, however, plans to simultaneously shut down three of its plants in Germany and cut tens of thousands of jobs.