Employees at General Motors plant in Brazil have returned to work , ending on Monday a strike that lasted two weeks, after the company held off on a plan to cut almost 800 jobs.
Reuters reported that GM and its union have agreed on a deal wherein those to be axed will instead be put on paid leave for the next five months and be compensated if the company goes ahead with the job cuts. The car manufacturer will also offer employees a buyout program, while the union said it will listen to proposals on a retirement plan.
Citing a company statement, Reuters reported that GM welcomes the development but maintains that this does not address the bigger issue of the competitiveness of the Sao Jose dos Campos complex. The report noted that GM announced last month that the said facility is not included in its $1.5 billion investment plan in Brazil until 2019 because its production costs are higher than standard.
As management cut production and jobs, workers soured on the company and staged a walkout on August 10, in a work stoppage. Reuters said this was one of the longest strikes in the plant in the past two decades.
Another report by Agencia EFE, however, said the plant's 4,000 workers decided to stop the strike after the Regional Court of Sau Paulo overturned the dismissal of 798 of their co-workers. It said GM's concessions were part of a court settlement.
It noted that the union is demanding GM to reduce work hours instead of the staff amid weakening sales. The report added that the union urged the government to prevent foreign automakers from repatriating profits and to take over facilities that axe workers.
Both reports mentioned that vehicle sales in Brazil are down by almost a fifth this year and industry players have reduced jobs. Reuters said the slowdown, expected to last until 2016, is caused by rising inflation, unemployment and interest rates.
