FRANKFURT -- Volkswagen Group should commit to investing in the development and production of batteries for electric cars, works council chief Bernd Osterloh told a German newspaper.
VW is considering building a 10 billion euros ($11 billion) battery cell plant in Germany that could rival Tesla's "Gigafactory," reports said in June.
VW has not confirmed the investment, saying only that no decisions have been taken. German media reports have said that the automaker is backtracking on the proposal.
Osterloh tied labor's agreement to cut jobs in Germany with VW building the battery plant. "Volkswagen has to build its own competencies in the area of cells and batteries on the research and development side," the paper quoted Osterloh as saying in an interview with the Sueddeutsche Zeitung published today.
"That is important for the sites in Germany. We need a commitment to the production of batteries in exchange for job cuts," he said.
VW is under pressure to make cuts at high-cost operations in Germany to fund a shift to electric vehicles following its emissions scandal. The company previewed an all-electric vehicle concept dubbed the I.D. at the Paris auto show last month. The model will go on sale in 2020 as the first of 30 EVs the automaker plans to launch by 2025. At the time, VW said it aims to sell a million electric cars by the same year.
The group's top executives have been in talks with works council leaders representing VW staff since June in an attempt to agree cost savings to fund the transformation to greener vehicles.
Osterloh warned in the newspaper interview that talks could fail if Volkswagen did not agree to invest in battery production.
He also said he wanted management to commit to production of certain car models in Germany to ensure high utilization at Volkswagen's plants in its home country and avert any closures.
Management is due to update workers on progress of the talks on Thursday.
Last week, Osterloh said that Volkswagen could cut up to 25,000 staff over the next decade as older workers retire to help the carmaker achieve cost-cuts needed to revive the VW brand.
Automotive News Europe contributed to this report