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April 12, 2005

BRAZIL: DaimlerChrysler says plant will stay open but is coy on details

DaimlerChrysler of Brazil said in a statement that the Mercedes Car Group board has approved a "concept of production" that will allow the continued operation of its Brazilian car plant in Juiz de Fora city, Minas Gerais state.

DaimlerChrysler of Brazil said in a statement that the Mercedes Car Group board has approved a “concept of production” that will allow the continued operation of its Brazilian car plant in Juiz de Fora city, Minas Gerais state.

But the Brazilian DaimlerChrysler outpost did not explain “concept of production”. A spokesman said only that details of the plan to keep the factory open would be presented soon.

The future of Juiz de Fora has been under threat since the beginning of the month, when DC cancelled the Smart Formore SUV that would have been made in Brazil and announced the end of Brazilian (previous generation) A-class production in the second half of the year.

The government of Minas Gerais, which provided financial incentives for DC to build the factory, said it had been told about plans to keep the plant open and was waiting for more news in the next few weeks.

But the head of Juiz de Fora’s trade union said he isn’t optimistic about the future.

“A-class production will end by August and DaimlerChrysler hasn’t answered questions about the future of the workers and the factory”, said union president Geraldo Werneck.

The union said that, as a result of the end of A-class production and the lack of expectations for the plant, some suppliers such as Johnson Controls, Magna/Decoma and Thyssen Krupp, will start to lay off employees in the next few months.

“The suppliers will dismiss about 200 workers by June,” added Werneck.

Rogério Louro

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