Argentina's biggest car maker, Renault, is to halve the workday for 1,300 workers, preventing firings as sales stall in a flagging economy, Bloomberg News reported.

Renault and its mechanics union agreed on the plan for the Cordoba plant, which will cut production by 47 percent to about 170 cars a day, Omar Dragun, general secretary of the Cordoba branch of the mechanics union, told the news organisation.

"This plan will avoid firings this year and avoid having some people suspended and others not," said Dragun. "This way everyone will work a little."

Bloomberg said that the agreement to reduce hours will save 400 jobs that the carmaker said in October it might eliminate.

Renault's sales dropped 20 percent last year to 56,177 vehicles from 1999. A Renault spokeswoman told Bloomberg that the plan would be reviewed at the end of June.

Bloomberg said that car companies have pressured the Argentine government to cut taxes to help lower the cost of a new car after the Oct. 31 expiration of a government-sponsored car swap program.

The industry and the government have yet to reach an agreement on how to lower costs. Companies expect sales to pick up in the second quarter, helped by lower interest rates and a growing economy, forecast by the government to grow by 2.5 percent this year.

Employees will be paid normally for the four hours a day they work and paid under a special scale for the 100 hours a month they don't work. Workers will lose an estimated three days worth of pay per month, Dragun told Bloomberg News.

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