HANOVER, Germany, Dec 19 (Reuters) - Talks between

Volkswagen and labour unions over plant closures and

pay cuts are expected to last well into Thursday as both sides

have still not reached a deal, according to two people familiar

with the matter.

Talks have been ongoing since Monday in hopes of reaching an

agreement before Christmas to prevent massive strikes that the

IG Metall union has warned could begin as early as next year.

Around 100,000 workers have already staged two separate

strikes in the past month, the largest in the company's history,

protesting management's plans to cut wages, reduce capacity, and

potentially shut down German plants for the first time.

Talks could still fall apart, the sources said, requesting

anonymity as the negotiations were private.

"There's still much to do," one of the sources said.

Volkswagen declined to comment and IG Metall was not

immediately available for a comment.

Both sides remain far apart on key issues, including the

potential for plant closures. Labour representatives have

strongly opposed this, while the carmaker has maintained it

cannot rule out the possibility.

Citing people familiar with the matter, Bloomberg reported

earlier in the day that Volkswagen and labour unions were

nearing an agreement to restructure the brand without closing

factories in Germany.

The management is willing to keep plants running and restore

job security agreements until 2030 in exchange for workers

foregoing bonus payments, according to the report.

Volkswagen, Europe's biggest automaker, is grappling with

lean demand, rising costs and cheap competition from China.