Daimler is reducing work hours at its Rastatt Mercedes A- and B-class plant in southern Germany to four or three days a week from 12 January until the end of February.

This follows the announcement of similar moves for the Sindelfingen factory yesterday and came soon after the automaker said it would extend its Christmas shut-down for all 14 factories in Germany.

Current labour deals mean Daimler cannot lay off workers until the end of 2011.