UPDATE 1-Strike threat looms as labor talks get under way in Germany

* Union demands 6 pct higher pay, right to shorter hours

* Employers reject demand for right to shorter hours

* Regional talks in Baden-Wuerttemberg due on Thursday

* Union IG Metall has threatened 24-hour strikes (Recasts, adds comments by head of Gesamtmetall)

FRANKFURT, Jan 11 (Reuters) - German labor bosses and industrial employers were at loggerheads before regional wage talks begin on Thursday, amid industrial action and the threat of strikes that could halt production at hundreds of companies.

The powerful union IG Metall is demanding 6 percent more pay for 3.9 million metals and engineering workers in Germany. It also wants them to gain the right to reduce their weekly hours to 28 from 35 to care for children or elderly or sick relatives, and return to full-time employment after two years.

Employers have so far offered 2 percent plus a one-off 200- euro ($239) payment in the first quarter and have rejected demands for a shorter working week unless hours could be increased temporarily as well.

"We can always talk about flexible working hours, but only if they can go not only down but also up," Rainer Dulger, the head of the Gesamtmetall employers' association, told the German newspaper Sueddeutsche Zeitung.

IG Metall, Germany's biggest trade union, has threatened to call for 24-hour walkouts if talks fail to make progress, harkening back to seven weeks of strikes in 1984 that helped push through a shortening of the work week to 35 hours from 40 hours.

Tens of thousands of workers have already staged short walkouts and rallied outside factory gates in recent days.

IG Metall chief Joerg Hofmann said employers have to soften their resistance to the union's proposals to avoid an escalation of the dispute.

But he held out little hope that major progress would be made on Thursday, when the union and employers meet for regional talks in the state of Baden-Wuerttemberg, where Daimler , Bosch and Porsche are based.

In remarks released on Thursday, Hofmann also said the union's wage demand was adequate given dividend payouts rose by 10 to 15 percent and that companies had enough leeway to pay up without choking off investments.

"And I do think that we will reach a decent result there," he said.

Negotiations for workers in Bavaria are due to resume on Jan. 15 and in North Rhine-Westphalia on Jan. 18.

($1 = 0.8365 euros) (Reporting by Ilona Wissenbach; Writing by Christoph Steitz; Editing by Larry King)