Sao Paulo – Workers at the biggest Volkswagen plant in Brazil temporarily halted their six-day-old strike Monday after company management announced a provisional suspension of its plan to lay off 1,800 employees.
The end of the strike was approved Monday in a workers’ assembly at the German company’s plant in Sao Bernardo do Campo near Sao Paulo, which employs 12,400 people.
The workers agreed to end the strike at least until Sept. 12 when management and the union meet again to negotiate an end to the crisis afflicting the company, which insists on a restructuring plan that entails hundreds of dismissals.
The union hopes to receive next Tuesday a new proposal from the carmaker about the necessity of restructuring the company.
The strike began last Tuesday, when management at the VW plant sent letters to 1,800 employees notifying them they would be laid off Nov. 21, when the firm’s employment-stability pact with the union is set to expire.
The company accepted suspension of the dismissals after a meeting Monday with union representatives, in which a truce was agreed and new negotiations were set for next week.
Volkswagen announced in May a restructuring plan that included firing 3,600 of its almost 22,000 workers in Brazil.
Faced with union refusal to accept the restructuring plan, the company threatened two weeks ago to close the Sao Bernardo do Campo plant, dismiss the 6,100 workers there and offer the rest positions at other VW facilities in Brazil.
The unions in response stiffened their opposition and the government, which called on company management to seek an alternative solution, announced that the state-owned development bank, BNDES, was suspending disbursement of a loan of nearly 500 million reais (roughly $200 million) to the VW enterprise in Sao Bernardo precisely because the firm had failed to reach an agreement with the union on the future of the plant.
In an interview last week, Brazilian President Luiz Inacio Lula da Silva, who began his career as a union leader at the plant in Sao Bernardo do Campo, blamed Volkswagen for its own crisis.
“Volkswagen carried out a project that had poor results and that is the cause of the problem,” Lula said, referring to the company’s strategic decisions.
“I believe Volkswagen acted precipitously in communicating the dismissals by letter without discussing the matter sufficiently with the government and the union,” the head of state said.
Volkswagen said that it is no longer competitive in Brazil due to the rise in the value of the real and that the downsizing plan is part of a global restructuring.
