By Victoria Waldersee

HANOVER, Germany (Reuters) – Crunch talks between Volkswagen and unions over cuts to the automaker’s German operations will resume on Wednesday after a brief break, reflecting intense efforts to strike a deal before Christmas and avert major strikes in 2025.

The pause follows 36 hours of negotiations, which began on Monday, as both sides seek to end a bitter standoff over potential factory closures and mass layoffs that has thrown Europe’s top carmaker into its biggest crisis in years.

An agreement before Christmas is still possible, a person familiar with the negotiations said, while cautioning that the complexity of the talks, which initially kicked off in late September, meant there is no guarantee of a deal.

Germany’s IG Metall union, which has vowed fierce resistance to any plant closures and staff cuts, said it would provide an update depending on any new developments, adding it was currently not clear when that would be the case.

The two sides have been trading blows over what Volkswagen says are necessary cost cuts to be able to compete with more agile and cheaper Asian rivals, all while an expected transition to electric vehicles has lost momentum.

Both have stuck to their red lines, with unions opposed to any plant closures, while VW does not rule them out, citing a shrinking European market and the need to cut overcapacity.

Germany’s most powerful union hopes for an agreement this week to give workers peace of mind before Christmas, threatening to escalate strikes in the new year if no deal is struck.

(Reporting by Victoria Waldersee; Writing by Christoph Steitz; Editing by Rachel More and Matthias Williams)