FILE PHOTO: The Mercedes star logo of an E Coupe is pictured before the annual news conference of Daimler AG in Stuttgart, Germany, February 2, 2017. REUTERS/Michaela Rehle/File Photo

FRANKFURT (Reuters) - Germany's Daimler DAIGn.DE could suffer a drop in production of Mercedes-Benz luxury cars next month because of a dispute over future projects between management and unions at a key plant.

The works council at Untertuerkheim, home to Daimler’s global headquarters, will oppose any overtime work from July 1 if management refuses to assign orders for development and production of an electric powertrain to the plant, works council chief Wolfgang Nieke said on Thursday.

The factory at Untertuerkheim near Stuttgart employs over 19,000 staff who build engines, transmissions and axles for Mercedes-Benz cars.

But workers fear that the plant may lose orders in future as Daimler is raising spending on electric cars that need engines which consist of fewer parts and require fewer workers on the assembly line.

Factory managers want to continue talks with labor in a constructive way but realize it will not be easy to resolve the row, plant chief Frank Deiss said, calling on workers to be willing to make concessions as the plant shifts focus to battery-powered engines.