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MUNICH, Jan 19 (Reuters) – German industrial conglomerate MAN AG <MANG.DE> will stop production of trucks at its German plants for 42 days during the first half of the year due to the economic downturn, it said on Monday.

Employee representatives and local authorities had agreed to shorter worker hours at the plants in Munich, Nuremberg and Salzgitter, a MAN spokesman told Reuters.

Around 9,400 employees will be affected by the measures. The spokesman said he could not rule out further short working hours in the second half of the year.

MAN had said in December output at its core trucks business could drop 30 percent in 2009 and it would halt truck production for 40 to 50 days. Shares in MAN reversed gains to trade down 0.4 percent at 33.37 euros by 1447 GMT.  Shares had risen as high as 35.25 euros, following a mandatory bid from Porsche

MAN AG Chief Executive Hakan Samuelsson said Saturday he expects 2009 to be a ‘very difficult year’ for the company’s truck and bus business with sales at ‘radical lower levels’ in all markets amid the world financial crisis.

This year “will be a very difficult year for trucks and buses in all regions,” Samuelsson told Zawya Dow Jones in an interview in Abu Dhabi after announcing the sale of a 70% stake in its MAN’s Ferrostaal unit to Abu Dhabi’ state fund International Petroleum Investment Co.

“Sales will be at radical lower levels as we can see it today,” Samuelsson said. “But it’s impossible to be concrete.”

Like other commercial vehicles producers, MAN is facing a tough time amid the financial crisis as demand for new trucks is slowing in many key markets.

Munich-based MAN has so far been focused mainly on the European market, but in December it announced it will acquire the Brazilian truck and bus operations of its biggest shareholder, Volkswagen AG, for about 1.18 billion euros ($1.58 billion).

Brazil, along with Europe and the Middle East, has been a lucrative source of earnings for global truck makers in recent quarters amid weak demand in Japan and North America.

However, Samuelsson said there has been a “sharp drop in demand for its products, also in until recently more buoyant emerging markets”. (wsj.com)

CEO comments indicate that truck market is continuing to deteriorate and bottom is not in sight or more specific outlook will be announced in connection with the Q4’08 report.

*Negative news for PKC Group