Thousands of Volkswagen workers in Germany went on strike on Monday after the company announced plans to close three plants and slash pensions. 

"Warning strikes will begin Monday in all plants," said Thorsten Gröger, who is leading the union negotiations with German auto giant.

"If necessary, this will be the toughest wage dispute Volkswagen has ever seen."

Tens of thousands of employees with the IG Metall union stopped work at 9:30 a.m. The strike is set to last two hours, a process which will be repeated by the late shift. .

The move is a response to €18 billion ($19 billion) in budget cuts at the struggling carmaker, which includes major changes to its generous pension plan and an unprecedented three plant closures within Germany. 

"We demand that all make their contribution — management and the shareholder side as well," workers' council leader Daniela Cavallo said at the rally outside VW's flagship plant in Wolfsburg, referencing a demand from employees that executives take cuts to their Christmas bonuses.

She said the next round of talks, schedule to take place next week, "is likely to set the course — rapprochement or escalation. We are ready for both."

Sluggish economy

The issues at Volkswagen highlight the struggles facing the eurozone's economic powerhouse.

Germany's export-heavy economy has been suffering in recent years due to declining industrial orders.

VW, for example, has seen its once-lucrative Chinese market rapidly shrinking as domestically produced electric vehicles become more popular there. Moreover, looming EU tariffs on Chinese EVs have prompted fears of retaliatory measures.

In October, VW reported a 64% plummet in third-quarter profits. Other German automakers, such as BMW and Mercedes-Benz, have also reported major losses.

es/zc (AFP, dpa)