BERLIN -- Thousands of workers at car, steel and engineering plants in Germany's former communist east went on strike on Tuesday to fight for the same working hours as western colleagues, a demand analysts say could harm the region.
Thirteen years after reunification, metalworkers in eastern Germany work 38 hours per week, three more than in the country's west.
The giant IG Metall union had originally accepted the gap, aimed at making up for differences in productivity between the two sides; but the union has now called for a gradual reduction in hours to reflect the advances of eastern plants.
"The employers need to stop blockading the reduction in working hours," said Klaus Zwickel, head of IG Metall, arguing that the East German engineering industry had made a leap forward in the past few years, with the sector growing by 4.4 percent last year.
Carrying banners reading "Time is up," thousands of workers rallied at the factory gates of a Volkswagen AG car plant near Zwickau and other factories in eastern Germany.
The union and steel industry employers said talks would resume on Friday after they failed to reach agreement on Tuesday. But no date was set for talks for workers in the engineering sector, and strikes there would be extended into next week.
Economists say the region would not be able to stomach implementing union demands.
Despite huge transfers set to continue until 2019, eastern Germany has grown more slowly than the west since 1997, and unemployment has been higher than in western states.
Paying the same wages for reduced hours would drive up wage costs by almost 10 percent, economists say.
Employers say eastern German firms would lose their competitive advantage and investors would be driven to neighboring countries such as Poland or the Czech Republic.
"Foreign investors in particular say the three-hour gap -- the lower wage costs -- is the only competitive advantage the region has," said Frank Moehrer from the VSME employer federation of metal and electrical industries in Saxony.
After the fall of communism in 1989, large sums were invested in the poorer east.
"Production is capital-intensive, but not very labor-intensive," said Andreas Scheuerle, economist at DekaBank. "With unemployment running high in the east, it doesn't make sense to make labor more expensive."
In the state of Saxony, about 19 percent of people are without jobs, compared with a national average of 11 percent.
At the plant of printing machine manufacturer MAN Roland in Plauen, hundreds of workers stopped work. The site produces 10 to 15 percent of the company's total revenues.
"The strike is making the already difficult situation even worse," company spokesman Thomas Hauser said.
Since Monday, workers have also been on strike at Volkswagen sites in Saxony. VW normally builds 1,100 cars per day in its plant in Zwickau and 3,400 engines in nearby Chemnitz.
The VSME's Moehrer said the strikes could cost the metal and electrical industries in Saxony about 10 million euros per day in lost revenues. Smaller firms like car part suppliers which must produce to very tight deadlines would be particularly hard hit.
"I cannot rule out that some of these suppliers will be so impaired by the strikes that it will deal them the final blow," he said.
However, economist Ralph Solveen of Commerzbank said many firms could make up for production shortfalls relatively quickly if strikes did not drag on for months.
"But the impact of the strikes sending a negative signal to investors is bigger," he said.