The Brazilian auto market has taken a bit of a tumble over the last year, forcing Volkswagen to cut 800 jobs at one of its plants in the country. The job cuts have caused workers to protest the layoffs in an open-ended strike.
The plant in question is VW’s Sao Bernando do Campo factory near Sao Paulo. Workers began an open-ended strike to protest the recent loss of the 800 positions due to slumping demand for cars in the country. According to a statement from the local union, workers who were laid off were notified in a written letter that they “would not be returning to their posts after the holiday period”. Union General Secretary Wagner Santana argued that the 2012 strike ballot, which passed for the union in 2012, did not permit “unilateral” job cuts.
Fenabrave, Brazili’s dealership association, announced that auto sales in the world’s seventh largest economy fell 7.15 percent, the lowest in over five years. The slumping demand puts another 1,300 VW jobs in limbo.
Volkswagen said in a statement that Brazil’s auto market, which happens to be the fifth largest in the world, has endured two years of negative growth (read: sales volume drops), thus taking a toll on profits. The Sao Bernando plant is affected more than others due to its large workforce of 13,000 employees. Plummeting domestic sales and exports saw production decline 15 percent in 2013, with 2014 not looking much better.
Volkswagen also made it clear that it had attempted to negotiate with the union on ways to cut staff by less drastic measures, including imposing collective taking of holiday time and temporary suspension of contracts. The German automaker now says that those measures do not suit the current economic climate in the country.
The Motrolix Take
Here’s to hoping that Brazil’s economy turns around, and does so quickly, so that consumers continue once buy more cars, enabling the workers to return to work.