Volkswagen announced Wednesday that it has terminated several wage agreements with IG Metall. The changes will take effect at the end of 2026 and affect approximately 100,000 workers at the automaker’s main German plants.

The move is part of a broader restructuring as Volkswagen faces growing pressure from Chinese competitors and seeks to cut costs.

IG Metall condemned the decision and vowed to escalate the dispute, warning of possible strikes. A union representative called the termination a “despicable blow to the workforce” and said workers should expect a fight.

The current strike truce is due to expire on January 1, raising the prospect of significant labor action early in the new year. Such action could disrupt production and Volkswagen’s restructuring plans.