(Adds union crowd estimate, comment from Ford)
By Brad Haynes
SAO PAULO, Jan 12 (Reuters) - Thousands of Brazilian metalworkers marched on a highway outside of Sao Paulo on Monday to protest layoffs by carmakers, adding to a mounting crisis in a politically sensitive industry.
State police said about 7,000 workers from Volkswagen AG , Ford Motor Co and the Mercedes-Benz truck unit of Germany’s Daimler AG occupied a lane of the highway linking Brazil’s biggest city and biggest port.
The union organizing the protest estimated that total participation was close to 30,000, based on the number of workers at three auto plants shut down for the march.
Last week Volkswagen and Mercedes-Benz confirmed more than 1,000 job cuts, accelerating a drop in auto industry payrolls that dwindled nearly 9 percent last year.
VW and Mercedes workers have already responded with strikes and the participation of Ford employees bolstered labor leaders’ assertion that the resistance to layoffs will be industrywide.
Auto industry groups in Brazil are forecasting little or no recovery from a sharp downturn in 2014, as rising interest rates and expiring tax breaks contribute to weak consumer confidence. Carmakers have responded by cutting costs, ending an agreement with Brazil’s government to avoid layoffs.
The labor standoff is testing the mettle of President Dilma Rousseff’s new economic team, which took charge this month promising to end the cheap credit and tax incentives that have propped up key industries but wrecked government accounts.
The auto industry contributes a quarter of Brazil’s industrial production and its powerful labor unions helped to found the ruling Worker’s Party.
A Mercedes-Benz representative confirmed its workers were involved in the demonstration, adding that the company recognized their right to protest. She said production at its local truck factory was stopped for the day.
Volkswagen reiterated a recent statement that the company urgently needs to reduce costs at its local plant, known as Anchieta. Workers there have halted production since Tuesday.
Ford representatives confirmed a one-day stoppage at the company’s factory outside of Sao Paulo as workers participated in the demonstration in what they described as an act of “solidarity.”
Unlike many major automakers in Brazil, Ford has not announced substantial layoffs in response to the downturn. (Additional reporting by Alberto Alerigi Jr.; Editing by Jeffrey Benkoe and Christian Plumb)