By Wolfgang Mulke
BERLIN, June 28 (Reuters) - German engineering union IG Metall and employers were both still apart on Saturday in marathon talks aimed at ending a strike in eastern Germany that has hurt the country's key car industry, union sources said.
Employers and IG Metall had resumed negotiations on Friday and have talked for over 14 hours, amid hopes a deal could be struck to end a strike for shorter working hours, which has lasted for almost four weeks.
The talks were still continuing in the early hours of Saturday.
"The employers want to move us around like puppets. They haven't moved at all," one source at the union said, dimming hopes for a deal.
Ahead of the talks, IG Metall chief negotiator Hasso Duevel said he hoped for a deal. "We are very interested in solving the conflict here today," he said.
Addressing a news conference after a separate meeting in Berlin with trade union leaders, Chancellor Gerhard Schroeder said he expected agreement soon to end the strikes.
"In the interest of the development of the economy as a whole and in the east of our country in particular, I hope this conflict will be resolved as soon as possible," he said.
Volkswagen AG said on Friday it had stopped production of its top-selling Golf model at its main Wolfsburg plant in western Germany for lack of parts from the east.
The strike has idled BMW AG plants in western Germany this week, as parts from strike-hit eastern factories were not delivered, prompting fears the action could dampen the already fragile growth in the entire German economy.
The German car industry accounts for 10 percent of total industrial output and hundreds of thousands of jobs.
Workers at car and steel plants in the still depressed former communist east have been on strike since early June, demanding a reduction in the working week by three hours to 35 hours, the standard for their western colleagues.
PRODUCTIVITY GAP
Employers say the 38-hour week for the 310,000 engineering employees in the east is justified because of lower productivity than in the west. But eastern workers say they feel like second-class citizens 13 years after unification.
IG Metall is demanding a gradual cut in hours, which it says is justified by advances in eastern productivity. Faced with little public support for a strike in the most depressed part of Germany, the union has come under pressure to compromise.
Economists warn that the former east, where the rate of unemployment at about 19 percent is more than double that in the west, risks driving investors further east to neighbouring Poland or the Czech Republic if it pushes up labour costs.
BMW has said the strike might make it reconsider the scale of an investment in the eastern city of Leipzig, where it is building a new factory that would create 5,500 jobs.