General Motors on Tuesday said it had fired 450 workers from a factory in Brazil as the contracting local car market took another hit a day after Germany’s Volkswagen said it would slash nearly 4,000 jobs in the country, Reuters reported.

In a statement cited by Reuters, General Motors said it would cut the 450 jobs at a unit in Sao Jose dos Campos in Sao Paulo state which employs about 8,500 workers.

The cuts were carried out after a period of voluntary lay-offs, during which General Motors hoped 600 workers would vacate their positions, Reuters noted.

The head of the metal workers union of Sao Jose dos Campos, Luiz Carlos Prates, told Reuters the workers were fired after too few opted for the voluntary lay-off programme.

“We will demand the return of the fired workers,” Prates reportedly said. “If there is no agreement we will go on strike in 48 hours.”

Reuters noted that, with stiflingly high interest rates and low investment, Brazil’s economy has come to a virtual standstill in recent months under President Luiz Inacio Lula da Silva, who came to power in January. Vehicle sales in Brazil fell 8.2% in the first six months of the year from the same period of 2002, the report added, and several of Brazil’s leading car makers have periodically suspended production in recent months due to the contracting market.

Workers at VW‘s Anchieta plant — where many of VW’s nearly 4,000 job cuts in Brazil announced on Monday will take place — threatened on Tuesday to go on strike if the German car maker breaks contracts they say ensured job stability until 2006, Reuters said.