(Adds similar agreement at Ford plant in Brazil)
By Alberto Alerigi
SAO PAULO, Sept 18 (Reuters) - Workers at a Volkswagen AG and a Ford Motor Co factory in Brazil have agreed to cut their work hours by a fifth, accepting pay cuts to avoid mass layoffs as the local auto industry struggles through its worst crisis in nearly two decades.
About 11,600 at Volkswagen and 4,400 at Ford will work 80 percent of their usual hours under the accord, the local metalworkers union said on Friday. If the government approves, it will pay 10 percent of the workers’ current salaries, so workers only see a 10 percent pay cut, under a the terms of its Job Protection Program (PPE).
The agreement at the Ford plant in São Bernardo, Brazil outside Sao Paulo, Brazil’s biggest city, ends an eight-day strike, the union said in a statement. The Ford agreement will also extend an earlier income-protection scheme to 100 workers laid off starting in May and apply the terms of the same older program to workers facing layoff in January, the union said.
Representatives for Volkswagen AG confirmed that it had reached a PPE deal with the union, pending government approval, at its Anchieta plant also in suburban São Paulo. Volkswagen 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. (Additional reporting by Brad Haynes in Sao Paulo and Jan Schwartz in Hamburg and Jeb Blount in Rio de Janeiro; Editing by W Simon)