Volkswagen’s Brazilian unit has said it may close one of its factories if it fails to reach an agreement with labour unions over its proposed restructuring plan.

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According to Reuters, the steep appreciation of the Brazilian real against the US dollar has made it increasingly difficult for automakers in Brazil to export to foreign markets, a key aspect of their business.


Volkswagen reportedly said in a statement it would consider closing its Anchieta factory on the outskirts of Sao Paulo if the local metalworkers union does not agree to a restructuring plan that foresees laying off thousands of workers.


If the restructuring plan is not approved, Volkswagen said the factory would no longer be eligible for new investments that are needed to keep the plant up and running.


“It’s imperative that the Anchieta plant receive new investments in order to produce new models. If not, the reduction of its workforce will have to be even larger than what we already announced,” Nilton Junior, VW Brazil’s executive director for corporate labour relations, said in a statement cited by Reuters.

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In July, the German automaker said it planned to lay off between 4,000 and 6,000 workers out of a total 21,000 employees in Brazil by 2008 to reduce losses caused by the unfavourable exchange rate.


Volkswagen employs 12,000 people at Anchieta, one of five factories in the country.


According to Reuters, the automaker’s restructuring plan foresees laying off 3,600 people at Anchieta in the next two years, offering all of them severance packages.


Earlier this month, VW ordered 3,400 Anchieta workers building export Gol models off on a compulsory 10-day holiday from 28 August.


But if the union baulks at approving the plan, Volkswagen said it would start by laying off 1,800 employees on 21 November, without severance packages.


A spokesman for the metalworkers’ union told Reuters workers would meet on Tuesday to discuss Volkswagen’s restructuring plan.