STUTTGART/FRANKFURT, Germany -- Pressure to lengthen Germany's work week looked set to increase after employees at carmaker DaimlerChrysler agreed on Friday to work longer to save jobs and cut costs.
DaimlerChrysler workers agreed to implement a 40-hour week for some jobs and cut paid break time to secure 6,000 jobs in Germany in a deal that will save 500 million euros ($613 million) a year from 2007.
German Chancellor Gerhard Schroeder greeted the carmaker's deal with the IG Metall union as "a victory for common sense", which would strengthen Germany's economic recovery and set a precedent for talks at rival Volkswagen.
"I am certain that after DaimlerChrysler the negotiations at Volkswagen over cost cuts and job security will lead to a successful agreement," said Schroeder, who is on holiday in Italy, in a statement.
The agreement will guarantee companies more flexibility as they face global competition while at the same time securing jobs in Germany, Schroeder said.
DaimlerChrysler said its deal, struck after weeks of talks during which employee protests disrupted output, would help luxury unit Mercedes grow profitably and guarantee production in Germany until 2012.
"The agreement sets the course for increased productivity and efficiency and so strengthens the long-term competitiveness of the Mercedes car group," Mercedes chief Juergen Hubbert said, adding the group would make up production lost.
Over 60,000 employees took part in nationwide protests last week, incensed that they were being asked to make sacrifices while senior DaimlerChrysler management appeared untouched by the group's problems at Chrysler in the United States and its Japanese partner, Mitsubishi.
In a conciliatory gesture, DaimlerChrysler's management board agreed to take a cut of 10 percent in overall remuneration, while 3,000 managers in Germany will also have their packages reduced as part of the cost-cutting program.
The dispute centered on DaimlerChrysler's home state of Baden-Wuerttemberg, where workers enjoyed better terms and conditions than at other plants in Germany.
Mercedes had threatened to move production of the new version of its C-class saloon from Sindelfingen, near the group's Stuttgart headquarters, to plants at Bremen in northern Germany and at East London in South Africa, threatening 6,000 jobs.
Paid hourly breaks for workers in Baden-Wuerttemberg will be cut by roughly half, with some workers losing 30 hours of breaks per year. Workers in all of Daimler's development and planning departments will implement a 40-hour working week.
The carmaker's productivity plan follows a similar move by manufacturing and technology giant Siemens AG, which recently won employee agreement to increase working hours at two German works without extra pay.
In France, workers at a Robert Bosch car parts factory voted on Monday to lengthen their working hours to save jobs, making them the first employees to vote to scrap France's 35-hour week.