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Workers at Volkswagen factories in Germany are preparing to strike within weeks, as executives at Europe’s biggest carmaker rejected their demand to rule out plant closures in the country.

“We will prepare for an escalation from the beginning of December,” said IG Metall’s chief negotiator, Thorsten Gröger, on Thursday evening after the social negotiations which lasted more than six hours.

VW’s plans to close three German factories, cut tens of thousands of jobs and cut remaining workers’ wages by 10 percent have met fierce resistance from the powerful works council and union of the car manufacturer.

VW has never closed a domestic plant in its 87-year history, and the company’s crisis has stoked concerns about the health of German industry and its export-focused business model .

Daniela Cavallo, chairwoman of VW’s works council and who holds half of the seats on the company’s supervisory board, acknowledged that current market challenges, including falling sales in Europe and shrinking market share in China, are structural.

But she pushed VW executives to develop a better product strategy for the future and argued that labor costs should not be the sole focus of the planned savings, which she estimated at nearly 17 billion euros.

The works council and the union proposed on Wednesday to forgo 1.5 billion euros in future salary increases, if the automaker agreed to limit executive bonuses, reduce dividends and cancel plans for closure of factories.

The proposed package – the first concession in the increasingly tense conflict between VW workers and managers – would lead to executives giving up part of their bonuses over the next two years, as well as a “contribution via dividend policy.

The money saved would instead be put into a “solidarity fund” to support wages during periods when factories were operating at reduced capacity.

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

The proposal should, however, be studied more closely to determine “whether it creates both lasting financial relief for the company and provides clear prospects for workers.”

The first production disruptions at VW will likely be warning strikes, which are temporary walkouts. These can now take place from December 1 at the company’s factories in Wolfsburg, Salzgitter, Kassel, Emden, Hanover and Brunswick.

Negotiations are expected to resume on December 9 and Cavallo has said he wants to reach an agreement on the restructuring before Christmas.