Workers at Volkswagen biggest plant in Brazil on Tuesday put down their tools after receiving 1,800 layoff notices in what could presage more job cuts and a possible plant closure.
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Workers at the Sao Bernardo do Campo car plant, which employs 12,000, approved an indefinite strike starting immediately in response to the firings, set to take effect from November, according to Reuters, which noted the dismissals followed months of talks with management.
“Volkswagen decided to get itself a fight with its workers. This is going to be a tough struggle,” Jose Feijoo, president of the metalworkers union in Sao Paulo’s ABC industrial belt, told the news agency. Workers will decide how to proceed with the strike on a day-to-day basis.
Reuters said the plant’s workers account for more than half of 21,000 people Volkswagen employs in Brazil – the Sao Bernardo plant churns out 960 vehicles per day, including the popular compact Fox. A one-day warning strike over planned layoffs at Volkswagen’s three passenger car plants in May resulted in 2,500 vehicles not being produced.
Volkswagen has two other plants in Brazil producing motors, trucks and buses.
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By GlobalDataReuters noted that Volkswagen threatened to shut down the Sao Bernardo plant, also known as Anchieta, last week. It is the oldest plant in Brazil. The country’s president, Luiz Inacio Lula da Silva, started his career as a metalworkers union leader in the same region.
VW also said last month it may lay off between 4,000 and 6,000 workers until 2008 to staunch losses caused by an unfavourable foreign exchange rate which is hitting exports.
Brazil’s state-run development bank BNDES said late on Monday it would halt a loan worth 497m reais ($US232m) to the automaker until VW concludes negotiations with the unions and decides the plant’s fate.
The company and the union have been has been negotiating benefits and the number of jobs cuts, without which Volkswagen says the plant would not receive investment and would have to be closed eventually, Reuters added.
Compulsory holiday for VW workers
