Volkswagen's CEO and labour boss clashed during a staff meeting on Wednesday, with management pushing for major cuts while workers warned of more strikes if plant closures remain part of wage negotiations at the embattled German automaker.

The gathering of around 20,000 workers at Volkswagen's main plant in Wolfsburg was also attended by German Labour Minister Hubertus Heil. The two sides will meet for a fourth round of talks on Dec. 9.

Volkswagen insists that plant closures and pay cuts are needed in Germany to respond to Chinese competition, but workers describe both measures as red lines while threatening further strikes after a first round of walk-outs earlier this week.

"As management we're not operating in a fantasy world. We are making decisions in a rapidly changing environment," Volkswagen Group CEO Oliver Blume told workers in Wolfsburg, warning new competitors were entering the market with unprecedented force.

The executive's speech was interrupted repeatedly by booing from workers, according to sources in attendance, including when he brought up that he had grown up in the region and Wolfsburg was close to his heart.

Europe's car sector is in turmoil, with thousands of jobs on the line at automakers and their suppliers, all suffering from a weakening market on the continent and a slower-than-expected take-up of electric vehicles.

"The price pressure is immense," Blume said, adding VW had to work its way back up sales rankings in China, its single biggest market and a stable earnings contributor until recently, and that labour costs in Germany were too high to compete.

"We therefore urgently need to take measures to secure the future of Volkswagen. Our plans for this are on the table."

Daniela Cavallo, who leads Volkswagen's labour council and has repeatedly criticised Blume for not getting involved enough in the conflict, said that all sides, including management and shareholders, had to make sacrifices.

She said unions remained committed to trying to get a deal done before Christmas.

"That will mean compromises. Concessions too. Things that you don't like and that sometimes hurt you one way or another. But that has to apply to all sides," she said. "Otherwise it's not a compromise."

According to sources present at the meeting, labour minister Heil urged all sides to find a solution that excludes plant closures or forced layoffs, securing future investment to support Germany's struggling industrial sector.

Workers could increase pressure if no agreement is struck during next week's negotiations, union officials have signalled, leading to longer and possibly even open-ended strikes.