Daimler cuts hours for up to 18,500 workers over chip shortage

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The Mercedes Benz star is seen on the bonnet of a new Mercedes-Benz S-Class limousine at the company's test center, near Immendingen, Germany October 14, 2020. REUTERS/Arnd Wiegmann

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  • To halt production at Bremen, Rastatt plants for a week
  • Workers to focus on special projects on reduced hours

BERLIN, April 21 (Reuters) - Daimler (DAIGn.DE) will cut working hours for up to 18,500 employees and temporarily halt production at two plants in Germany due to a shortage of semiconductor chips that has hit global car production, it said on Wednesday.

"Currently, there is a worldwide supply shortage of certain semiconductor components," a spokeswoman said. "We continue to play things by ear."

"The situation is volatile, so it is not possible to make a forecast about the impact," she added.

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Daimler, which makes Mercedes-Benz cars, said workers at its plants in Bremen and Rastatt would have their hours shortened.

The move will halt production at the factories but allow staff to continue working on special projects. The production halt will take effect from April 23 for one week, initially.

The move was earlier reported by Focus Online, citing dpa news agency.

The global shortage stems from a confluence of factors as carmakers, which shut plants during the COVID-19 pandemic last year, compete with the sprawling consumer electronics industry for chip supplies.

Cars have become increasingly dependent on chips - for everything from computer management of engines for better fuel economy to driver-assistance features such as emergency braking.

The shortage of chips has hurt vehicle production at carmakers including General Motors Co (GM.N), Volkswagen AG (VOWG_p.DE) and Ford Motor Co (F.N).

Earlier on Wednesday, automaker Stellantis (STLA.MI) said it would replace digital speedometers with more old-fashioned analogue ones in one of its Peugeot models, in a fallout from the shortage of semiconductor chips.

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Reporting by Madeline Chambers Editing by Riham Alkousaa

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