DaimlerChrylser has today won its battle with unions over the introduction of new working practices, striking a €500m (£332m) a year cost-saving agreement.

After three days of talks, the carmaker secured a deal with union negotiators at IG Metall to lengthen the working week for research and development staff from 35 hours to 40 hours.

There will be a 39-hour week for services staff in Baden-Württemberg in order to iron out regional wage inconsistencies, and overall employee flexibility will be increased.

As part of the deal, managers and board members have also agreed to take pay cuts.

Gerhard Schröder, the German chancellor, said the deal would help strengthen Germany's economy, and would set a precedent for cost cutting efforts at other German companies, particularly fellow carmaker Volkswagen.