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Workers at Volkswagen factories in Germany are preparing to strike within weeks as bosses at Europe’s biggest carmaker rejected their demands to rule out factory closures in the country.

“We will prepare for an escalation from the beginning of December,” IG Metall chief negotiator Thorsten Gröger said late Thursday, at the end of labor negotiations that lasted more than six hours.

VW’s plans to close three German factories, eliminate tens of thousands of jobs and cut wages for remaining workers by 10 percent have faced fierce opposition from the automaker’s powerful works council and union.

VW has never closed a domestic factory in its 87-year history, and the crisis at the company has raised concerns about the health of Germany’s industry and its export-oriented business model.

Daniela Cavallo, VW’s works council chief who commands half the seats on the company’s board, has acknowledged that current market challenges, including declining European sales and shrinking market share in China, are structural.

But she has urged VW executives to come up with a better product strategy for the future, arguing that labor costs should not be the only focus of planned savings, which she has estimated at almost €17 billion.

The works council and the union on Wednesday made an offer to lose 1.5 billion euros in future wage increases, if the carmaker agreed to rein in bonuses for executives, cut dividends and cancel plans to close factories.

The proposed package – the first concession in the increasingly tense conflict between VW workers and executives – would see executives give up parts of their bonuses over the next two years, as well as a “contribution through dividend policy”.

The money saved would instead go to a “solidarity fund” to support wages during periods when the plants were running at reduced capacity.

VW on Thursday said the protracted negotiations had focused on the workers’ proposals. The company’s chief negotiator Arne Meiswinkel, who did not attend the meeting due to illness, said it was a “positive signal that the employee representatives have shown openness to reducing labor costs”.

However, the proposal would need further study to determine “whether it creates both sustainable financial relief for the company and offers clear prospects for the workforce”.

The initial production disruptions at VW are likely to be so-called warning strikes, which are temporary strikes. These will now take place from December 1 at the company’s factories in Wolfsburg, Salzgitter, Kassel, Emden, Hannover and Brunswick.

Talks are scheduled to resume on December 9 and Cavallo has said she wants to reach an agreement on the restructuring before Christmas.