German car maker Volkswagen has warned that 30,000 jobs could be lost at its six German plants unless staff accept a two year pay freeze.
Unions argue a freeze is unacceptable, demanding instead a 4% annual rise.
Volkswagen says it needs to save 500m euros in costs to guarantee the future of its 176,000 strong German workforce in the face of growing competition from rivals operating out of low cost eastern European markets.
As well as a two year pay freeze, VW wants workers to accept longer working hours without extra pay and a reform of overtime payments.
Unions have threatened protests and stoppages in their pursuit of a 4% wage deal and guarantees from the company over future employment.