Strikes spread in Brazil as automakers cut workers in downturn
By Brad Haynes
SAO PAULO Jan 7 (Reuters) - Workers at a Mercedes Benz truck factory outside of Sao Paulo voted on Wednesday to stop work for 24 hours in a protest over fired colleagues, the second such strike in as many days as automakers cut payrolls in anticipation of a third straight year of slumping sales.
The local metalworkers union said Mercedes Benz, a unit of of Germany's Daimler AG, had cut 244 workers at the factory and about 750 others remained on paid leave through April out of about 11,000 employees at the plant.
A Mercedes representative said some of the laid off workers had taken voluntary buyouts, but did not confirm how many. She had no immediate response to the union's announcement of the strike beginning Wednesday morning.
On Tuesday workers at a Volkswagen AG plant in the same town, Sao Bernardo do Campo, declared an indefinite strike after the company cut 800 workers and warned of a pressing need to further trim staff.
The high-profile job cuts point to rising tensions in the auto sector, which produces a quarter of Brazil's industrial output, after a slow burn of buyouts and paid leave over the past year.
Payrolls in Brazil's auto industry shrank about 7 percent in 2014 as domestic vehicle sales fell by the most in a dozen years due to rising interest rates, weak consumer confidence and the end of long-running tax breaks for the industry.
The labor standoff is testing the mettle of President Dilma Rousseff's new economic team, which took office promising an end to the cheap credit and tax incentives that have propped up key industries but wrecked government accounts.
In his inaugural remarks this week, Finance Minister Joaquim Levy blamed the favoritism shown to some industries for Brazil's fiscal challenges and lack of competitiveness in many sectors.
Still, Brazil's powerful industrial unions form the foundation of Rousseff's Workers' Party and have pressured the president to intervene in recent years to beat back the threat of job cuts, keeping unemployment low despite stagnant growth.
Even with the extension of temporary tax breaks since 2012, auto sales slipped 0.9 percent in 2013 and fell another 7.2 percent in 2014, a dealership association said on Tuesday. The group forecast a further 0.5 percent slip in sales this year. (Editing by W Simon)
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