BRASILIA: U.S. multinational automaker Ford will trim hours and labor costs at its factory in the southeastern Brazilian city of Sao Bernardo do Campo under a government program that will avert the company’s plans to lay off 200 workers, a labor union said.
Ford and workers’ representatives agreed to adhere to the federal government-proposed employment protection program, or PPE, that entails a reduction in the work day and salaries, the metalworkers’ union of the ABC, an industrial region of Greater Sao Paulo that includes Sao Bernardo do Campo, said in a statement.
After the agreement was reached, workers announced the end of a strike launched eight days ago in protest against the planned layoffs by Ford.
Earlier, Mercedes-Benz and Volkswagen, which also have operations in the ABC, agreed to adhere to the same program.
In talks with the union, the three companies negotiated a 20 percent reduction in the work day for six months, extendable by an equal length of time, and a 10 percent decrease in salaries.
The remaining 10 percent of the salary reduction will be financed by the FAT workers’ protection fund, one of the mechanisms included in the PPE.
The automotive sector in Brazil, hard hit by an end to years of cheap credit and tax breaks and a contracting domestic economy, is in severe crisis.
Brazil’s economy is in technical recession after contracting for two consecutive quarters, while interest rates are high to keep inflation in check. To provide a boost to struggling automakers and other sectors, state-controlled banks said this week they would offer credit lines with lower interest rates.
Auto sales in Brazil plunged 23.9 percent in August from the same month of last year and were down 8.9 percent relative to July, the National Association of Car Manufacturers, or Anfavea, said.
The sector has responded by taking measures to cut output, including reducing work days and even carrying out mass layoffs at some factories.
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