A strike over job cuts at a General Motors plant in Brazil has ended but trouble has now broken out at a Mercedes factory in the country.

According to Reuters, workers at the GM plant in Sao Jose dos Campos have ended a two week strike after the company agreed to suspend nearly 800 job cuts.

As just-auto reported yesterday, a downturn in the economy has seen Brazil’s auto industry alone (excluding components) shed 20,000 jobs in the past 19 months despite the opening of new BMW, Chery and Jeep assembly plants.

GM and the local metalworkers’ union told Reuters they agreed the workers facing termination would spend the next five months on paid leave and would get an extra payment if their jobs are cut early next year. The company would also open a voluntary buyout program and the union said it was open to discussions about retirement plans.

“GM believes this is a positive decision, but it does not resolve the competitiveness issues with the Sao Jose dos Campos complex,” the company said in a statement.

GM last month announced additional spending of US$1.9m on its Brazilian operations but said the Sao Jose plant would not see new investment because it is not cost competitive.

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By GlobalData

Labour relations at the plant have deteriorated amid layoffs and a dwindling production lineup, Reuters noted.

The walkout, halting operations, started at Sao Jose dos Campos on 10 August and was one of the longest strikes at the plant in the past two decades, the news agency said.

According to just-auto‘s PLDB, the plant now builds just two ageing models – the Chevrolet TrailBlazer SUV and the Brazilian version of the Colorado/S10 pickup truck. No other products have been assigned to it.

In contrast, the newer plant at São Caetano do Sul builds four newer model lines – Cobalt, Cruze, Spin and Montana.

To add to auto workers’ woes, Daimler on Monday said it would cut an additional 1,500 jobs at its Mercedes-Benz truck plant near Sao Paulo, leading workers to declare an open-ended strike at the factory.

Mercedes has had a troubled history in Brazil since a late 1990s venture to build the A-class compact in a new factory faltered in 2004 after low sales. The car plant was under-utilised for years before being converted for a much more successful commercial vehicle venture.