GM In Brazil Forced To Cut Labor As Credit Crisis Deepens
21 Januar 2009 - 2:55PM
Dow Jones News
The ongoing credit crisis has General Motors Corp. (GM) in
Brazil sending 1,633 temporary workers home before their work
contracts expire, the company said in a press release
Wednesday.
The local subsidiary of the U.S. automaker said that low
expectations for car sales in the first half of 2009 led the
company to put the temporary workers on paid leave until their
temporary contracts expire. For some workers, that means their GM
paychecks could end as early as this month, a GM spokesman said
Wednesday.
In Sao Paulo, over 12,000 metalworkers from the automotive
industry took to the streets in protest of sector-wide layoffs as
the global credit crisis hits home.
Brazil's record breaking auto sales began to slow in October
once banks increased lending rates and shortened payment terms,
causing companies to rethink production levels as cars sit unsold
on dealers' lots nationwide.
Protesting autoworkers are calling on the government to make
aggressive cuts to interest rates Wednesday in order to spur
consumer demand for new cars.
The monetary policy committee, Copom, will decide on interest
rates after market hours on Wednesday. Market expectations are for
rates to fall to 13% from the current 13.75%, making them one of
the highest interest rates in the world.
GM said it has not laid off any full time staff employees.
The company said that if sales return, then GM would reevaluate
the temporary workers agreement. For now, the autoworkers will lose
their jobs at GM once their respective temporary work contracts
expire over the next several weeks.
Brazil is one of the most important auto markets for GM and
other international automakers. However, sales have been declining
along with those in the U.S. and Europe as the credit crisis
impacts the real economy, causing layoffs across many sectors in
Brazil.
Over 650,000 jobs were lost in Brazil in December, nearly half
the number of jobs created in all of 2008, the Labor Ministry
reported Monday.
-By Kenneth Rapoza, Dow Jones Newswires, 5511-2847-4541,
kenneth.rapoza@dowjones.com
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