HANOVER, Germany, Sept 25 (Reuters) - Volkswagen (VOWG_p.DE) flatly rejected union demands after the first round of bitterly contested talks ended without agreement on Wednesday, as workers at Europe's largest automaker threatened strikes against layoffs and possible plant closures.

German automaker Volkswagen rejected trade union demands for pay increases for German workers and continued to warn of deep cuts instead during initial collective bargaining talks on Wednesday. VW earlier this month cancelled a long-standing job security deal with workers and warned that it could no longer rule out mass layoffs or plant closures as part of an austerity plan at the auto brand.

Volkswagen AG and unions start negotiations over wide-ranging cost cuts on Wednesday, with tensions between both sides higher than they’ve been in years.