The labor dispute that was holding up production of The Hobbit films (see “On Strike Against ‘The Hobbit’”) has been settled, at least temporarily, but production of the films may still leave New Zealand, according to The Press.  Both the local actors’ union and supporting international unions had agreed that if production began before March 31, 2011, that there would be no labor action by actors, according to the report.

But director Peter Jackson released a statement indicating that the unions’ actions were too little, too late.  “The lifting of the blacklist on The Hobbit does nothing to help the films stay in New Zealand,” Jackson said according to Variety.  “Next week Warners are coming down to New Zealand to make arrangements to move the production offshore.”

Prime Minister John Key is ready to meet with Warners execs in an effort to keep production in New Zealand, according to the report. 

Some suspect that Warners’ actions are a bit of arm-twisting to get better tax incentives for keeping production in New Zealand.    

Production of the films has finally be set to begin in February after resolution of financing issues related to MGM’s financial straits (see “Hobbit Starts Shooting in February”).