Dow Jones Newswires - The union, which had approved strike plans Thursday, said early Monday that first-shift employees agreed to strike. Second-shift workers also approved the strike Monday afternoon. Under Brazilian law, unions must announce plans to strike at least 48 hours before stopping work.
Automobile sales in Brazil have taken a hit this year as the global economy slows, dragging down Brazilian growth with it. Restrictions on auto financing have also crimped sales after a surge in new car loans in 2009 and 2010 led to record default levels earlier this year. Sales so far this year are down 1.2% from 2011 levels, and production is 9.4% lower than at the same time last year.
According to GM, only half of the 7,500 employees at its Sao Jose dos Campos plant--one of three vehicle assembly lines it has in Latin America's biggest country--adhered to the strike. Therefore, output was only reduced by half, with the Corsa assembly line, for example, producing 19 vehicles an hour, rather than its full capacity of 38 vehicles an hour, GM's director of institutional relations, Luiz Moan, told Dow Jones Newswires. He declined to say how many vehicles overall the strike will affect.
The union, however, said that all first- and second-shift employees adhered to the strike, completely halting output at the Sao Jose dos Campos plant and as a result cutting GM's daily output by 750 vehicles.
The union is striking to avoid job cuts at the line that assembles passenger cars, such as the Corsa, that according to GM have fallen in popularity as new models go into production. Production of one model of passenger cars, the Zafira, was ended last week, and only three other models are still being produced at the Sao Jose dos Campos plant.
But while the strike targeted the passenger-vehicle jobs, GM said Monday that production of other vehicles, such as light commercial vehicles and pick-up trucks, was also cut in half by the strike.
GM has yet to decide whether to shut down the passenger-car production line, Mr. Moan said. The company will meet with the union again this week or next and will study consumer demand for the Sao Jose dos Campos-produced models through the end of the month before deciding whether to end passenger-car production there.
The union will also meet with government representatives Tuesday to discuss possible layoffs at GM. As part of a tax cut announced in May, car makers were prohibited from reducing the size of their work force.
The car maker alleges that previous disagreements with the union prevented investment in the plant that would have allowed it to start producing more popular models in Sao Jose dos Campos.
GM, which said last week that it was suspending the construction of a 710 million-Brazilian-real ($349 million) transmission plant in the city of Joinville, is expected to release its five-year investment plan next month. The car maker earmarked BRL5 billion for investment during the 2008-12 period. Mr. Moan declined to say whether the company would boost or reduce planned investments during the next five-year period.
