By Emma Thomasson
BERLIN, June 23 (Reuters) - The IG Metall union and employers might resume talks soon to try to end strikes by workers in eastern Germany that are now hurting output at factories in the west, employer sources said on Monday.
Sources from the Gesamtmetall engineering employers' federation told Reuters they expected a formal invitation from IG Metall to restart negotiations before Wednesday, when representatives are due to meet in Berlin.
"It would make sense if IG Metall called for negotiations by then," one employer source said.
As the strikes seeking a shorter working week entered their fourth week, the engineering union called on 9,000 workers to down tools at nine factories in the eastern states of Berlin, Brandenburg and Saxony.
But IG Metall strike leader Hasso Duevel said the fact the union had not decided to extend the strikes to other regions signalled a desire to reach a deal. "We don't want any worsening but rather a speedy and sensible solution of the conflict," he said.
IG Metall's vice-president Juergen Peters told German radio on Monday that the union was ready to consider cutting the working week to 35 hours from 38 in stages and at varying speeds depending on the economic position of individual plants.
Engineering workers in the east currently work three hours longer a week than their counterparts in the west, a difference employers say is justified because of lower productivity.
Carmaker BMW said the strike had stopped production at its Munich factory, where it builds 800 of its 3-Series cars per day and at Regensburg, where it makes 850 of the mid-sized cars. About 10,000 workers were affected. Volkswagen said it would have to halt production of its Golf and Lupo at its Wolfsburg plant on Friday due to a shortage of parts from eastern German factories.
THREAT TO EASTERN COMPETITIVENESS
Germany's VDA auto industry association said the daily production loss due to strikes was 1,370 vehicles in eastern Germany and 1,800 vehicles in the west. VDA President Bernd Gottshalk said the strike and the demand for shorter hours risked undermining eastern Germany's competitive advantages.
"The strike is hitting the eastern German car industry in the midst of a time of revival and integration," he told a news conference. "The investment process will grind to a halt."
Chancellor Gerhard Schroeder has urged unions and employers to end the strikes as soon as possible so as not to further damage growth in the already depressed former Communist east.
Wolfgang Wiegard, chairman of the "five wise men" panel of independent economic advisers to the German government, told ZDF television on Monday the strike would probably not hurt the national economy much but was "fatal" for the east.
"This strike is a strike for more unemployment in eastern Germany," he said, warning that firms were likely to consider moving further east when the European Union expands next year to include neighbouring Poland, the Czech Republic, and others.
"The standing of eastern Germany as a place to do business will suffer and is already suffering."
The German car industry accounts for 10 percent of total industrial output and hundreds of thousands of jobs.
Unemployment in the former Communist east is about 20 percent. BMW has said that because of the strike it may reconsider the scale of an investment in the eastern city Leipzig, where it is building a new factory which was due to create 5,500 jobs. (With additional reporting by Madeline Chambers in Frankfurt)