UPDATE 1-VW says strikes will cost 20,000 units of output


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PARIS, June 23 (Reuters) - The head of Europe's largest carmaker, Volkswagen AG , said on Monday strikes by engineering employees in eastern Germany would have lost it 20,000 units of production by the end of the week.

"We will lose 20,000 cars at least by the end of this week," Bernd Pischetsrieder said on the sidelines of an auto industry conference in Paris, but said it was too early to say whether the loss of production could be caught up in the course of the year.

He declined to comment on whether there would be an impact on VW's full-year target of selling over five million vehicles.

Members of the engineering union IG Metall are striking in support of a campaign to reduce the working week in eastern Germany by three hours to 35, the standard in western Germany.

The union on Monday threatened to spread strike action in eastern Germany to the west of the country if talks set to resume from Thursday fail to bring a deal by the weekend.

VW had already said it would have to stop producing its flagship Golf model at its main Wolfsburg plant this week if the strikes continued as the action halted production at some important auto suppliers in the eastern German states of Brandenburg, Berlin and Saxony.

The industrial action comes at a time when VW is in any case slowing production of the Golf, its best-selling model, ahead of a replacement due later this year. Pischetsrieder said production of the larger Passat model was also affected.

VW's luxury rival BMW said the strike had stopped production on Monday 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.



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