MercoPress. South Atlantic News Agency

Labour dispute paralyzes VW main plant in Brazil

Volkswagen Brazil workers voted Wednesday to halt all activities in protest over the layoff notices sent to 1.800 members of the workforce.

The 8.000 workers on the overnight and morning shifts from the city of Sao Bernardo do Campo plant, VW's largest in the country, approved the strike decision called by the Brazilian Metallurgical Workers Union when news of the first layoff notices begun arriving.

On Tuesday unionized workers walked off the job to protest the German company's decision to cut the 12.400 workforce at the Sao Bernardo do Campo plant by "at least 25%", according to union sources.

VW management last Tuesday begun the distribution of letters to 1.800 employees notifying them they would be laid off as of November 21 when the current employment-stability agreement with the union expires.

The delivery of the dismissal letters coincided with a union meeting to determine the organization's stand on the German automaker's announced intention of reducing the staff at Sao Bernardo by 3,600 and restricting the employment rights of the remaining workers. VW has also mentioned the possibility of slashing operations at the factory and eliminating up to 6.100 jobs.

The company argues such drastic measures are necessary to keep the plant competitive and if not it will be forced to close it down "in the short term". In a bid to make the layoffs more palatable, Volkswagen is offering severance of around two weeks' pay for every year worked at the plant, but the union dismisses it as "inadequate".

Union leaders said workers would remain inside the plant, arms crossed, and meetings would be held at each shift to keep the protest going.

The layoff notices and the strike came after Brazil's state-owned development bank, BNDES, said earlier this week it was suspending disbursement of a loan of nearly 200 million US dollars to the VW Sao Bernardo operation precisely because the firm had failed to reach an agreement with the union on the future of the plant.