probably does go up with a 32 hour work compared to a 40 hour work week. But I highly doubt that overall productivity per employee goes up, at least in a manufacturing environment.
If they pay employees 40 hours, but ask them to do 32 hours of work, I don't think there's any way they somehow get more cars manufactured at that same price. Are they going to somehow increase the speed of the line by greater than 20%? No, because it'd most likely be unsafe to increase the line speed by greater than 20%.
The productivity you get per hour is higher, but I don't think they can install more widgets into a car in 32 hours than they would in 40 hours.