Portugal Colonial - VW's German workers to strike from Monday

"If need be, it will be the toughest collective bargaining battle Volkswagen has ever seen," the union said.

The crisis-wracked auto titan has been locked in bitter talks with unions since announcing in September that it was weighing the unprecedented step of shuttering plants in Germany, where it has around 120,000 employees.

VW has been hit hard by high manufacturing costs at home, a stuttering shift to electric vehicles and tough competition in key market China.

In a statement, VW said it "respects workers' rights" and believes in "constructive dialogue" in a bid to reach "a lasting solution that is collectively supported".

It also said that it had taken "advanced measures to guarantee urgent deliveries" during the strike action.

The crisis at one of Germany's industrial titans comes as the eurozone's top economy is struggling, and amid heightened political uncertainty with early elections looming in February.

After little progress in several rounds of talks between labour representatives and Volkswagen bosses, workers at VW factories across Germany will begin the first stage of planned strike action.

The campaign is starting with "warning strikes", short walkouts that are a common tactic during negotiations in Germany.

But the action could escalate, with powerful union IG Metall warning that VW will face the biggest wave of strikes the country has seen for decades unless management dials back its cost-saving plans.

- 'Extremely regrettable' -

Ahead of talks last month, the union and VW's works councils put forward a series of proposals they said would save 1.5 billion euros ($1.6 billion) in labour costs without the need for site closures.

These included proposals for management and staff to waive bonuses. The union also said it could drop a demand for pay rises in exchange for working shorter hours at some factories.

But Volkswagen said it had concluded that, while the measures could help in the short term, they would not lead "to any long-term financial relief for the company in the coming years".

IG Metall at the time described VW's response as "extremely regrettable", accusing it of "ignoring the constructive proposals of the employee representatives".

Volkswagen's parlous financial position was highlighted in October when it reported a 64 percent plunge in third-quarter profits.

Slowing business in VW's most important market China, where homegrown rivals are zipping past the German carmaker, has been a particularly heavy blow.

VW cited "economic reasons" last week when it announced the sale of its operations in China's Xinjiang, though the company had also been under pressure to exit the region due to human rights concerns.

Further clouding the outlook in the world's number two economy is the EU's move to impose hefty tariffs on Chinese-made electric cars, which VW fears could trigger retaliatory steps.

The manufacturer's woes reflect a broader crisis in the European auto industry, with demand weak and the transition to electric cars slower then expected.

In Germany, VW, BMW and Mercedes-Benz have all downgraded their forecasts recently while key suppliers to the industry have been lining up to announce job cuts.

Ferreira--PC