Volkswagen has proposed offering voluntary retirement to its workers in Brazil, according to Reuters, in a bid to resolve a conflict with workers at the plant. Volkswagen is hoping around 1,300 workers will take up the offer.

The voluntary retirement plan will be put to the 12,400 workers at Volkswagen's Sao Bernardo plant on Thursday, according to dpa-AFX news.

Volkswagen Brazilian workers downed tools last week after the company issued 1,800 lay-off notices as it attempts to restructure its unprofitable operations in the country and reduce its 21,000-strong workforce. The company said earlier this year that it planned to cut between 3,800 and 6,000 jobs in Brazil by 2008, and that the parent company in Germany thinks that Brazil has one too many plants.

Last month, Volkswagen threatened to shut down its oldest and largest plant in the country at Sao Bernardo (also known as Anchieta) if a solution could not be reached.

The original lay-off notices, which would have taken effect from November, have been cancelled, as unions and management agreed to find a solution by the middle of September.

Volkswagen's operations in Brazil have been hit by the appreciation of Brazil's currency, the real, which it says may cause a 100,000 unit decline in vehicle exports by 2008.

Volkswagen is the largest vehicle exporter from Brazil. In 2005 it exported 260,000 vehicles to other Latin American countries, as well as Europe and North America.

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