BERLIN, June 27 (Reuters) - Negotiations between union and employers were set to restart on Friday to try to end a strike in eastern Germany for shorter hours that has hurt output in the country's key car industry.
Exploratory talks on Thursday between IG Metall union leader Klaus Zwickel and Martin Kannegiesser, head of the Gesamtmetall employers' federation, ended with the two sides still far apart.
Despite the entrenched differences, formal negotiations were due to resume in Berlin at 2 p.m. (1200 GMT) on Friday.
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 the 35 hours which is standard for their western colleagues.
Employers say longer hours are justified because of lower productivity in the east. But eastern workers say they feel like second-class citizens 13 years after unification and IG Metall says a gradual cut in hours is justified by eastern advances.
The strike idled plants in the west of carmakers Volkswagen AG and BMW AG this week as parts from eastern factories were not delivered, prompting fears the action could dampen 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.
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 Leipzig, where it is building a new factory which was due to create 5,500 jobs.
Chancellor Gerhard Schroeder, who has urged a speedy end to the strikes so as not to further damage prospects for the already depressed region, is due to hold talks on Friday with Michael Sommer, head of the DGB union federation.
The trade unions are traditionally close allies of the ruling Social Democrats but relations have soured of late as Schroeder has proposed reforms to welfare benefits and labour laws which the unions say will hurt workers' interests.