Volkswagen employees in Brazil downed tools on Wednesday, halting output at three passenger car plants in a 24-hour strike over planned layoffs, the metal workers’ union told the Reuters news agency.

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The report noted that automakers like Volkswagen and General Motors have said they would have to resort to layoffs because of falling exports after the Brazilian currency’s sharp appreciation against the dollar in the past two years.


A company spokeswoman confirmed to Reuters that three plants stopped producing due to the strike, and said Volkswagen had estimated the strike would result in 2,500 vehicles not being produced.


The 12,400 workers at the German carmaker’s Sao Bernardo do Campo plant are protesting against plans to fire over 3,600 workers, according to the metals workers’ union of Sao Paulo state’s heavily industrial ABC region. Volkswagen employs 21,000 in Latin America’s largest country.


The union told Reuters the company seeks to lay off a total of 5,773 people in Brazil. Volkswagen has not confirmed the numbers, saying restructuring and layoff plans are still being discussed with the unions.

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Volkswagen officials reportedly said the company may forgo exporting 100,000 vehicles until 2008 due to the exchange rate. Exports account for 40% of Volkswagen’s Brazilian output.


The Sao Bernardo plant alone churns out 960 vehicles per day, including the popular compact Fox Europa. The Taubate plant in Sao Paulo making Gol cars and the Sao Jose dos Pinhais in the souther Parana state were also on strike, according to Reuters.


GM workers in Sao Paulo state resorted to demonstrations at the same time as Volkswagen employees were on strike, the report added.