*

Fifth round of talks between VW management, unions

*

Talks could last days, collapse could mean strikes

*

VW shares down 2.5%, Porsche SE shares down 2.9%

(Adds shares in paragraphs 7,9 and details on Porsche in

paragraphs 12-15)

By Victoria Waldersee

HANOVER, Germany, Dec 16 (Reuters) - Volkswagen's

works council chief said that cost cuts must exclude

plant closures or redundancies, as a last-ditch round of

pre-Christmas negotiations began on Monday.

Europe's biggest carmakers are being squeezed by high costs

and the arrival of cheaper Chinese competitors which are taking

the battle for market share to their home turf.

Both sides in the VW stand-off are prepared for their fifth

round of official talks since end-September to last several

days, unless it becomes clear they are too far apart to reach a

deal, in which case negotiations will be paused until 2025.

VW's works council head Daniela Cavallo said a compromise

must be struck which is good for both workers and the company.

"Workers don't want to go into Christmas in fear," she told

union members outside the hotel where talks are held.

A person familiar with the negotiations said Monday's talks

were expected to last into the night.

Unions have threatened strike action at an unprecedented

scale from next year if a deal is not struck in 2024.

Volkswagen, Europe's biggest carmaker, has seen its share

price fall by more than a third over the past 12 months,

reflecting the difficulties the sprawling German group has in

tackling rising rivals and a slowdown in electric vehicle

demand.

"If we don't reach an outcome within our red lines, I'm

certain that workers will respond to the union's calls for

escalation," Cavallo then told reporters.

Shares in Volkswagen were down 2.5%.

Union representative Sascha Dudzik repeated workers'

steadfast opposition to mass redundancies and plant closures,

which Volkswagen has said it cannot rule out as it attempts to

adapt capacity to reduced demand.

More than 100,000 staff at nine plants across Germany downed

tools last week in the largest strikes at the carmaker,

protesting against management's stance that wages must be cut

and capacity downsized for the VW brand to stay competitive.

In a sign of the depth of Volkswagen's problems, its top

shareholder Porsche SE on Friday said it may have to

write down the value of its 31.9% stake by as much as 20 billion

euros ($21 billion).

This is mainly due to the delay in Volkswagen's annual

planning round as a direct consequence of the prolonged talks

with unions, Stifel analysts said in a note.

Such a writedown would still assume a book value for

Volkswagen shares that is more than twice as high as its current

market price, they added.

Shares in Porsche SE, which serves as the investment vehicle

of the Porsche and Piech families and also holds a 12.5% stake

in the namesake carmaker, were down 2.9%.

($1 = 0.9527 euros)