SAO PAULO, Sept 18 (Reuters) - Workers at a Volkswagen factory in Brazil have agreed to cut their hours by one-fifth, accepting lower pay to avoid mass layoffs as the national auto industry struggles through its worst crisis in nearly two decades.
About 11,600 workers at the factory will work 80 percent of their usual hours under the accord, the local metalworkers union told Reuters on Friday. If the government approves, it will pay 10 percent of salaries, so workers only see a 10 percent pay cut, under a measure known as the Work Protection Program (PPE).
Representatives for Volkswagen AG confirmed that it had reached a PPE deal with the union, pending government approval, at its Anchieta plant outside of Sao Paulo, Brazil’s biggest city. The company did not give details of the accord.
A deep recession has forced automakers and organized labor to find common ground in recent weeks, with car sales down more than 20 percent and demand for heavy trucks tumbling nearly 45 percent so far this year.
Daimler AG reached a similar deal with workers at a nearby truck plant last month, putting off 1,500 job cuts that had triggered a strike at the factory in Sao Bernardo do Campo.
General Motors Co also agreed in August to suspend nearly 800 job cuts at a factory in Sao Paulo state after a two-week strike.
On Friday, workers at a Ford Motor Co factory in Sao Bernardo do Campo also agreed to end a strike that began last Thursday to protest job cuts, according to labor leaders, who declined to say if they had reached a deal with the company. (Additional reporting by Brad Haynes in Sao Paulo and Jan Schwartz in Hamburg Editing by W Simon)