GM, Mercedes to furlough all workers in Brazil, suggesting production stop
INTERNATIONAL - General Motors and Mercedes Benz will furlough all employees in Brazil later this month, the companies said on Wednesday, suggesting that production in South America’s main auto center will be heavily impacted by the coronavirus outbreak.
Brazil’s automakers had been bracing for a potential breakdown in its parts supply chain from China starting in April that could disrupt production. But neither company mentioned supply chain issues in their statement.
GM said that it needed to “align production to market demands.” Mercedes, owned by Daimler, said that it wanted to prevent the spread of the coronavirus.
GM’s Chevrolet is Brazil’s best-selling car brand and the company’s decision could potentially lead other large Brazilian automakers to furlough and halt production.
Mercedes is focused on heavy truck production in Brazil, where it is the market leader.
A union source representing some of the company’s workers in Brazil said they would have liked for the company to furlough workers sooner to protect their health.
The source said that the furlough would last March 30 through April 12 and workers will be paid in full, in accordance with Brazilian law.
Mercedes said that its furlough will last from March 25 through April 19 and had already been negotiated with its unions.Reuters