Volkswagen says it wants to lengthen its standard working week at plants in western Germany to 35 hours without raising salaries in an effort to save jobs and remain competitive. The move – which would end a 28.8-hour working week in place since 1994 – is designed to improve efficiency. (Forget about the American work week of 40+ hours.)

But union leaders oppose the move, which VW sees as key to a comprehensive agreement on pay and conditions. It previously said that 20,000 jobs were at risk unless productivity could be increased.

VW needs union approval to see the changes through. The two sides have agreed to hold further discussions about the issue before the summer holiday although talks about a future pay settlement are unlikely to start in earnest until later in the year.

Union officials said workers were already stretched to the limit, putting in a large amount of unpaid overtime. The introduction of a shorter working week in 1994 helped to save 30,000 jobs which were under threat at the time.

But facing fierce competition and with higher labour costs than many of its rivals, VW has warned that fundamental restructuring of its German manufacturing base is needed. Its scope for action is limited, however, by a seven-year moratorium on compulsory redundancies lasting until the end of 2011. During that time, VW can only reduce its workforce through early retirement or by voluntary redundancy. Last month, VW offered severance packages to 85,000 German staff.