Workers at Volkswagen Czech unit Skoda Auto rejected what the company called its final pay offer and plan a three-hour strike on April 17, a union official said.
Skoda is the Czech Republic's largest company with sales of 203.7 billion crowns ($9.80 billion) last year, the country's largest exporter and a key customer of dozens of parts makers.
"Everything is pointing to it (a strike)," a union official, who asked not to be named, told Reuters.
The April 17 strike would be a warning of possible further action.
"We are planning further pressure action which can lead to an indefinite strike," the official said.
Management offered a 10 percent rise in basic pay after a series of talks, plus a rise in bonuses and other benefits raising overall pay by about 13 percent, but the unions have demanded more.
The company wage offer covers 21 months until the end of 2008. Wages would be hiked further in 2008 only if inflation exceeds 3 percent, a point contested by the unions,
Annual inflation was 1.9 percent in March and the central bank and analysts expected it to rise late this year.
The Skoda Auto group employed 27,680 people at the end of 2006.
The official said the unions would wait for the company's response, which may come on Monday.
A Skoda spokesman was not immediately available to comment.
The Czech economy grew 6.1 percent in 2005 and 2006 thanks to export-driven companies like Skoda and there have been no major strikes in recent years.
Consumption has, however, begun to rise, the labor market has tightened with unemployment falling to 7.3 percent in March, and the central bank is closely watching wage negotiations as a sign of future inflation pressures.
President Vaclav Klaus visited a Skoda plant on Thursday and said negotiations there would be a signal for the whole economy. He said management should not hike pay much, news agency CTK reported.