By Ray Furlong BBC correspondent in Kamp-Lintfort, Germany

These Siemens workers' jobs were saved by the deal.

The thump of techno mixed with the crack of thunder, as the rain washed down on the Kamp-Lintfort "Summer Beach Party".

But it wasn't only the weather that was casting a dark shadow over the event. Staff at the local Siemens factory, one of the main employers in the area, have just agreed to work longer for less money.

"It affects me very badly," says Britta Norisch, a production-line worker at the plant. "I wouldn't have minded the extra hours and the loss of my Christmas bonus and my holiday money, but they've also cut our output bonuses.

"I'm a single mother. I've lost 20% of my income and now I need to find an additional part-time job."

Under the new deal, Siemens have saved around 30% of their overall wage bills at the plant. It is a key issue in Germany, which has the second highest wage costs in the world.

But what really made the headlines here was the agreement to return to a 40-hour working week - a deal seen as historic by much of the German media.

50-hour week

'There was a huge conflict in the 1980s, when the trade unions fought and won the 35-hour week," says economist Matthias Schaefer from the conservative Konrad Adenauer Foundation.

"We also had this culture to say 'the benefits of our system will be given away with less work'. Now we completely change this movement."

Unions feel workers were forced to accept Siemens' offer.

Siemens achieved the deal at Kamp-Lintfort, along with another at nearby Bocholt, by threatening to close down the plants and move production to Hungary. Coming against a backdrop of an economy that is just starting to grow after three years of near-zero growth and 4.4 million unemployed people, it has prompted a national debate over working habits.

"Why the Germans need to work more," was the cover headline on a recent edition of Der Spiegel magazine. The tabloid Bild newspaper has cited top economists calling a for a 50-hour week.

Other economists say the real issue is flexibility - the willingness to work more hours as and when needed.

Dialogue

In any case, companies around the country are taking their lead from Siemens.

Big name manufacturers like Man, Bosch and DaimlerChrysler are pushing for longer working hours, lower wages, or better productivity to fight competition from Eastern Europe and Asia.

The unions, meanwhile, are fighting a rearguard action.

"A general extension of working hours would be the biggest job-destruction policy in post-war history," said Jurgen Peters, head of the IG Metall union which negotiated the deal at Kamp-Lintfort.

"Anyone making such demands is irresponsible and has no conscience."

But in reality, his room for manoeuvre seems limited.

Union chiefs recently backed away from an open row with the Social Democrat government, which they accused of betraying its principles by siding with big business after unpopular labour market and welfare reforms pushed through last year.

Instead of backing a nascent alternative left-wing party, they opted to choose "dialogue" with the government and to "keep pushing for a change of policy".

Blackmail

Back at Kamp-Lintfort, there's an air of resignation.

"The leaders of Siemens said 'you can work for less money, or you can lose your job'. We had to take the second solution," said Social Democrat mayor Christoph Landscheidt.