SAO PAULO--Brazil's government will act only as a "mediator" in a
growing jobs dispute between unions and the Brazilian unit of General
Motors (GM, GMM.U.T), Labor Minister Carlos Brizola Neto said at a
news conference Monday.
"What we are most worried about is the possible impact of sudden, mass
firings," the minister told reporters. However, he added that
executives at the Brazilian General Motors subsidiary have been
"sensitive" to the issue. He said the labor ministry will act as
"mediator" regarding the question, without seeking to force a course
of action on either one side or the other.
GM is considering cutting jobs as demand weakens for the passenger-car
models produced at its Sao Jose dos Campos plant in Sao Paulo state.
The company has already ended production of three of the four models
of passenger cars it produced there. It has more workers than it needs
at the plant, a GM spokesman told Dow Jones, but stressed that the
company has yet to decide on any job cuts.
According to unions representing workers at the plant, as many as
1,500 jobs could be on the line.
Mr. Brizola Neto, however, rebutted union criticism that the
government has been lenient towards the U.S. auto maker, especially
since the government ordered cuts in value-added taxes earlier this
year for the auto industry.
Mr. Brizola Neto said, "The fact is, it's a business decision. The
company began studying this decision before the tax cuts were
announced. Furthermore, GM has promised to add jobs at its other units
in Brazil. They are not reducing jobs, on a net basis, but rebalancing
their workforce."
Brazilian Finance Minister Guido Mantega will meet Tuesday with
representatives of General Motors and Anfavea, Brazil's automakers
association, to discuss the possible layoffs, which could be
interpreted as a violation of a deal that exchanged a no-layoffs
pledge by companies in exchange for the tax cuts.
Mr. Brizola Neto said labor ministry officials will meet with GM and
union representatives Saturday to discuss the Sao Jose dos Campos
situation.
In response to slumping sales at the start of this year, in May the
government reduced what is known as the IPI tax on auto sales and also
eased reserve requirements for banks that issue auto loans. In
exchange for the stimulus measures, which are set to expire at the end
of August, the government demanded companies not reduce employment
levels in Brazil.
-Paulo Winterstein in Sao Paulo contributed to this article
Write to Tom Murphy at tom.murphy@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
July 30, 2012 16:06 ET (20:06 GMT)
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