SAO PAULO: Volkswagen AG has furloughed 4,200 workers at its second largest factory in Brazil for three weeks, a local union said on Monday, as a demand crisis forces domestic carmakers to manage excess capacity.
A representative of the metalworkers union of Taubate, about 90 miles (150 kilometers) northeast of Sao Paulo, said the move had stopped production at the plant, which made the top-selling Gol hatchback, the Voyage sedan and the Up city car. VW representatives had no immediate comment on the matter.
The carmaker's efforts to cut jobs at another plant near Sao Paulo in January triggered a 10-day strike, forcing the company to reverse layoffs of 800 workers and negotiate a new labor deal through 2019.
As exports to Argentina have plunged and demand in Brazil hits its worst downturn in over a decade, VW is cutting a shift at the Taubate plant and sending workers home for three weeks as part of the transition, according to the union official.
Just over a year ago, Volkswagen announced an investment of 1.2 billion reais ($370 million) at the plant to begin producing the Up. VW is one of many automakers now working to cut costs in Brazil, where sales and output are down over 20 percent in the first two months of 2015. Jobs in the auto industry have fallen 8 percent in the 12 months through February.
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