General Motors do Brasil will cut production in its Brazilian plants due to a reduced export forecast.

The automaker has reduced weekly working time from 45 hours to 40 in the São Caetano do Sul plant and begun a voluntary redundancy programme at São José dos Campos.

The company has predicted exports will reduce from $US1.4 billion to $1.3 billion this year, reducing profitability. This is due largely to the Brazilian currency's appreciation against the US dollar.

Although the automaker did not confirm it officially, weak Brazilian market sales this year have also contributed to the decision to reduce production.

Though industry-wide January-April car and light commercial sales increased 8.8% year on year, GM's sales were off 6.2%.

The voluntary redundancy programme is open to 500 workers in the São José dos Campos plant, but the automaker hasn't announced the number of jobs it plans to axe.

Corsa production will also be cut at this factory.

Argentina is also to be hit by GM cost cuts, according to local newspaper La Nación.

By the end of May, the automaker have will eliminated the second shift at its Rosario plant there, affecting 320 employees. GM has not said if it will transfer the workers to the first shift or just fire them.

GM gave no reason for axing the second shift, a surprising move as the plant boosted production 17.6% year on year to 20,857 vehicles in the first four months of 2005.

As a result of a partnership agreement signed by GM Argentina and Suzuki Motors in 1999, the Rosario plant produces the Opel-designed Chevrolet Corsa and the Suzuki-designed Grand Vitara SUV for sale with both Suzuki and Chevrolet nameplates.

Rogério Louro