Frankfurt, Germany (AFP) — Thousands of Volkswagen workers were to go on strike Monday in an escalating industrial dispute at the crisis-hit German auto giant with thousands of jobs at stake.

VW has been hit hard by high manufacturing costs at home, a stuttering shift to electric vehicles and tough competition in key market China. It has announced a plan to cut billions of dollars in costs.

The powerful IG Metall Union and the workers council have fought to protect jobs since VW announced in September that it was weighing the unprecedented step of shutting plants in Germany, where it has around 120,000 employees.

“Warning strikes will begin Monday in all plants,” said IG Metall negotiator Thorsten Groeger, announcing short walks-outs after the company had last week rejected the union’s proposals for protecting jobs.

“If necessary, this will be the toughest wage dispute Volkswagen has ever seen,” Groeger warned in a statement Sunday.

He charged that “Volkswagen has set fire to our collective bargaining agreements” and that the company board is now “throwing open petrol drums into it.”