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Daimler May Cut Hours, Slow Production

Automaker is considering cutting working hours at all its plants in Germany, widening plans to slow production as demand drops.

STUTTGART, Germany (AP) -- German automaker Daimler AG will cut work hours at its largest domestic plant for at least 2 1/2 months amid flagging demand for its cars, Daimler's works council chief Erich Klemm said Monday.

In addition to the cuts at the Mercedes plant in Sindelfingen, Daimler will shorten the workweek to four days -- and at times three days -- and will lengthen holidays from January 12 until at least March 31, Klemm said.

The output cut at Sindelfingen comes after Daimler has already said it would lengthen its Christmas stoppage for all of its 14 production facilities in Germany.

The hours reduction is a result of the world's economic situation, which caused the company's global car sales to fall 25 percent in November compared to a year ago.

Though Daimler is expected to sell fewer cars this year than next, a labor deal protects Daimler workers from layoffs until the end of 2011.

Daimler is best known for its Mercedes-Benz brand cars. The company also builds the compact Smart and luxury Maybach cars, as well as Mercedes trucks and buses.

The company builds the Mercedes C, E and S class cars at the Sindelfingen facility in southern Germany near the Stuttgart headquarters.

Ahead of Monday, Daimler had only said it was considering shortening hours at operations in Berlin, Bremen and Duesseldorf.

Spokeswoman Nicole Kicherer said those discussions were still ongoing.

"We're looking to see what can be applied where," she said.

She added that the company's management and labor representatives were also discussing shortening hours with employees at the Stuttgart-Untertuerkheim plant, with a decision there expected in the next few days.

Rival German carmaker BMW AG has also announced plans to start the Christmas holiday early at its main Munich production facility.

Still, BMW maintains it can sell as many cars in 2008 as last year.

"In Germany, we're still above 2007 levels," Philipp von Sahr, BMW's director for German sales and marketing, said in Monday's edition of the daily Tagesspiegel.

"At the end of the year, we should land closer to the levels of 2007."

Last week, the country's leading trade group, the German Association of the Automotive Industry said it expects 2.9 million new car registrations in 2009, down from the 3.1 million registrations it anticipates in the current year.

Daimler shares were up 12 percent at euro25.12 ($32.40) and BMW shares were up 7 percent at euro21 in late Frankfurt trading.

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