The German government reportedly welcomed on Monday DaimlerChrysler’s offer to cut top executives’ pay to resolve a dispute with employees over longer working hours.

“Surely it’s true that if you demand cuts from recipients of small and medium wages as is the case with Daimler it is a positive signal for the workforce if top earners are willing to accept cuts to their own salaries,” government spokesman Hans Langguth told Reuters, though he added the government did not want to interfere with negotiations.

A DaimlerChrysler spokesman reportedly confirmed on Sunday that the board wanted to “make a contribution to an overall settlement” after German newspaper Bild am Sonntag said that the board would forgo up to 10% of their pay.

Reuters said the dispute, which led to 60,000 workers downing tools on Thursday, continued over the weekend when more than 10,000 employees failed to turn up because their works council refused to agree overtime, delaying the assembly of 1,000 cars.

DaimlerChrysler’s Mercedes unit has demanded €500 million euros of annual savings at its main Sindelfingen plant near Stuttgart to avoid shifting production of the new C-class, due in 2007, to other plants, the news agency noted.

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