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SAO PAULO, Brazil, Nov 8 (Reuters) - Some 16,000 workers at a Brazilian factory
of Germany's Volkswagen AG vowed on Thursday to go on strike after the automaker
announced it would cut 11 percent of its staff in the country during a downturn
in the car industry.
Luiz Marinho, president of the ABC Metalworkers Union that represents auto workers on the outskirts of Sao Paulo, said the strike was scheduled to begin on Monday -- although the union was still open to negotiations if the layoffs were suspended.
"This strike will occur. The way, don't ask me," Marinho told reporters in Sao Bernardo dos Campos, one of the three "ABC" cities outside Sao Paulo where much of Brazil's car industry is centered. "I foresee a long fight."
VW, Brazil's largest car manufacturer, said earlier that it would cut 3,000 jobs, also as of Monday, at its 50-year-old Anchieta factory in Sao Bernardo, where 16,000 of VW's 26,800 employees in Brazil work. The company sent job termination letters out on Wednesday to the 3,000 employees' homes.
The collective dismissal would be one of the largest in recent years in Brazil and comes as a slowing economy, high interest rates and a weak currency have thrown the country's auto industry -- Latin America's largest -- into idle.
Two weeks of talks between management and the ABC Union fell apart on Tuesday after workers at the Sao Bernardo plant rejected VW's proposal to cut salaries and work hours by 15 percent to avoid slashing 4,000 jobs. That proposal had already been softened by VW from 20 percent.
Marinho said the main sticking point in negotiations had been a VW proposal that would have cut future wages by up to 30 percent.
Herbert Demel, president of VW Brazil, told reporters in Rio de Janeiro that the union had rejected all VW proposals.
"No one could have expected us to accept this rejection without doing something," he said.
VW issued a statement in Germany saying it had saved 30,000 jobs in 1994 through a similar solution of introducing a shorter work week.
"We had no other choice if we wanted to leave the company healthy for the long term," Demel said.
Just northeast of Sao Paulo in the city of Taubate, VW managed to strike a deal with local union leaders to cut wages and work hours by 12 percent to save 1,000 of 7,000 jobs. The agreement must be voted on by workers Wednesday.
Despite a strong start this year, Brazilian auto sales and production have plunged since July, as the turbulent economy quashed consumers' confidence and kept them out of showrooms.
Sales dipped 15 percent in October from a year earlier, while auto production fell 13 percent. Year-to-date, however, both sales and output are still about 9 percent higher than in 2000.
"In May we produced 160,000 cars and in September 100,000. We can't keep all the jobs with that decline," Demel said.
VW said in its statement that the use of modern manufacturing technology to make its new Polo model in Sao Bernardo had also made workers redundant. Although built in the 1950s, the Sao Bernardo plant has been continually modernized and recently received about $780 million in investments. It could receive another $1 billion as the company prepares the Polo model.
"The modernization of plants is always a factor when it comes to cutting workers, but that becomes an even bigger factor when production falls," said Fabio Silveira, an economist with Sao Paulo's MB Associados business consultants.
The ABC Union is one of Brazil's largest and best organized and its massive protests in the late 1970s helped lead Brazil back to democracy. But in recent years, labor relations have been peaceful in the ABC and strikes have been few and far between.
Union leaders have called a meeting at the factory's gates for Monday to decide on the form of the strike.
(Additional reporting by Denise Luna in Rio de Janeiro and Carlos DeJuana in Sao Paulo) (Copyright © 2001 Reuters Limited.)
Volkswagen and the steelworkers' trade union in São Paulo are heading
for a clash this week after staff at two of the German carmaker's plants rejected
a modernisation plan that includes a relaxation of traditional labour rules.
The conflict may spread out to other companies in this traditional union bastion as manufacturers face tough opposition in their bid to cut costs and upgrade some ageing plants.
Volkswagen intends to cut wages and working time by 15 per cent to preserve nearly 20 per cent of jobs at two plants in the country's industrial heartland.
The rejection of its proposal may lead to 4,000 redundancies, including 3,000 redundancies at its 42-year old Anchieta factory in greater São Paulo, which currently employs 16,000 workers.
"Work stoppage will start as soon as the first sacking is announced," said Luiz Marinho, president of the steel workers union in São Bernardo do Campo, who accused VW of "blackmail".
The German company is planning to invest R$2bn ($769m) in the Anchieta plant to refurbish it and start producing a new range of models there by the end of next year. But it says it needs to reduce payroll costs to remain competitive.
As part of the plan, VW wants to bring wages at its São Paulo plants in line with its other Brazilian units. Company officials say that the average salary of a steel worker in São Paulo is R1,600 a month as opposed to R730 in the south of the country, where VW and Audi launched a plant almost three years ago.
Most carmakers have recently opted to invest outside the São Paulo area.
The German company, whose leadership in the Brazilian automotive market is being challenged by Fiat, signalled its readiness to confront the union, whose strength has declined over the past 20 years.
"Volkswagen will analyse the situation and will take the necessary measures while trying to minimise the social impact," said the company.
Declining sales and a looming recession have increased stocks to the equivalent of more than a month's output, which means that a strike might prove ineffective.
But Mr Marinho has not ruled out picketing car dealers if the conflict intensifies. (©Fionancial Times, November 08, 2001)
BRAZIL: Workers at Volkswagens two car assembly plants in São
Paulo have rejected the companys latest proposal that they accept cuts
in salaries and working hours of 15 per cent or face the possible layoff of
3,000 to 4,000 workers. A spokesman for the union representing the VW workers,
the Sindicato dos Metalurgicos do ABC, a member of the IMF-affiliated National
Confederation of Metalworkers (CNM/CUT), said that managements offer had
not addressed the workers key demand of a job guarantee for those currently
employed, and that a strike would be called if the company began cutting the
The transnational car company had initially announced in late October that, due to the present decline in sales and the slowing Brazilian economy, unions had to accept its plan to cut pay and working hours by 20 per cent or face layoffs.
VW employs approximately 23,000 workers at its two car assembly plants in São Paulo and is Brazils biggest car manufacturer.
SAO PAULO, Brazil, Nov 6 (Reuters) - Workers at two Volkswagen plants in Sao
Paulo have rejected an offer to cut salaries and work hours by 15 percent proposed
by the German auto maker as an alternative to possible layoffs of 4,000.
Volkswagen, the biggest car maker in Brazil, has been at loggerheads with unions since late October over its bid to make the plants more competitive as car sales across Brazil decline amid a general economic slump.
The spokesman for the metalworkers union, which represents the 22,500 workers at the two Sao Paulo plants, said there would be a strike if layoffs begin.
"In essence, the proposal did not address the fundamental demand of the workers: a guarantee of a job for those that are employed today," said Celso Horta.
Volkswagen, which had its first offer of a 20 percent cut in salaries and hours rejected by unions in October, released a statement saying it regretted the workers' decision and would make a decision on their stand in coming days.
A spokesman for the company declined to say whether Volkswagen would go back to the bargaining table. (Copyright © 2001 Reuters Limited)
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