(Adds announcement expected, changes dateline to STUTTGART)
STUTTGART, Germany, July 21 (Reuters) - Carmaker DaimlerChrysler said on Wednesday a deal with the IG Metall engineering union over cost cuts was near and would probably be announced on Thursday.
The talks had not failed, but both parties needed more time and a news conference was likely to take place Thursday morning, a company spokesman said Wednesday evening after more than seven hours of talks.
"The negotiations continue constructively. Both sides are guided by the will to come to a result here," he said.
In a dispute that has threatened to undermine Germany's decades-old system of collective pay deals the head of IG Metall already said earlier he expected a deal.
"There will certainly be an agreement, because the current situation can't go on," Juergen Peters told Neue Presse newspaper.
DaimlerChrysler has threatened to shift 6,000 jobs from its main plant at Sindelfingen near Stuttgart to Bremen and South Africa unless workers agree to work longer hours and renounce a series of enhancements anchored in their local wage agreement.
The dispute comes amid a growing debate in Germany about longer working hours and follows a recent agreement by workers at two Siemens AG mobile phone plants to raise weekly working hours to 40 from 35 without any corresponding pay rise.
DaimlerChrysler says it needs to save 500 million euros in costs to stay competitive but unions have seen the demands as an attempt to break down the system of collective wage deals developed during Germany's boom decades after World War Two.
Peters warned that the dispute had wider implications.
"The regulation working time of 35 hours a week can only be exceeded in individual cases, where it protects employment," Peters said. "We do not want the door to be pushed in so that the individual case becomes the rule. The workers know that it's about more than Daimler."
The working time dispute comes as manufacturing workers in a number of European countries face mounting pressure to work longer and take fewer holidays to prevent jobs being moved to cheaper locations abroad.
The issue has taken its place in a wider debate about the need to reform straining health and welfare systems in the face of sluggish growth, high unemployment and a steadily aging population and added to resentment over the sacrifices demanded of workers and the less well-off.
Tens of thousands of DaimlerChrysler workers have walked off the job in protest at plants across Germany and DaimlerChrysler has said the management board will accept a pay cut of up to 10 percent to show it is sharing the burden.
BDI industry federation Michael Rogowski backed the idea but the head of IG Metall's Bavarian branch, Werner Neugebauer, rejected the offer as "a joke," saying the effect of a 10 percent pay cut would have little impact on top managers.
"Even if (DaimlerChrysler Chief Executive Juergen) Schrempp gets 6.8 million instead of 7.7 million, he's still a little above social welfare," he told German radio.