FRANKFURT -- General Motors and labor officials are nearing an initial accord on how the carmaker can cut 500 million euros ($667.3 million) from fixed costs in Europe while limiting the number of forced layoffs.
"There are signs that things could be firming up," a spokesman for the world's biggest carmaker said, but he stressed that negotiations were still going on and it was not certain that a deal was within reach.
"We are not going to make a decision dependent on a certain deadline. We want to get it right rather than getting it by a certain time," he said.
He was responding to comments from works council officials at GM Europe's main German unit, Adam Opel AG, that a deal could emerge by Christmas, celebrated on Dec. 24 and 25.
"Negotiations over a contract for the future have entered a decisive phase, and it appears that initial results could emerge before the Christmas break," the works council said in a flyer distributed to staff at Opel headquarters on Wednesday.
Jobs cuts were unavoidable given weak orders, it acknowledged, but union officials were still demanding that GM refrain from forced layoffs or plant closures.
Talks resumed on Thursday.
GM has already exhausted most traditional measures to preserve jobs such as reducing hours or offering early retirement, so the talks now focus on ways to cut staff on a voluntary basis, the labor group said.
These could include severance packages or setting up a new company that would temporarily employ excess staff. A decision on this could come as soon as next week, it said, adding it planned to brief employees on Dec. 9.
These so-called "transfer companies" could be a convenient way out to all sides.
Subsidized by the state, they let employers cut wage bills by shifting staff to the new firm at lower pay. Workers keep drawing a paycheck while they look for a new job, and the government does not have to pay unemployment benefits.
GM has not made a profit in Europe since 1999, despite previous cost-cutting drives that have reduced capacity by 28 percent.
It said in October it planned to eliminate up to 12,000 jobs -- roughly a fifth of its European workforce -- to save half a billion euros by 2006.
Most of the cuts target high-cost Germany, home to the world's most expensive car workers.
The maker of Opel, Saab and Vauxhall cars employed around 63,000 people at 11 production and assembly plants in Europe at the end of 2003 and produces around 1.9 million vehicles a year. It has 32,000 workers in Germany.