Daimler AG reversed course on the 1,500 job cuts announced last week at its Brazilian truck-making division, saying it will scale back hours by 20% instead as demand shows no sign of improving.
The agreement with local unions guarantees jobs until August 2016, and the Brazilian state will compensate employees for about half their lost pay, the Stuttgart, Germany-based company said in a statement Aug. 31. Workers at Daimler’s factory in Sao Bernardo do Campo went on strike in response to the cuts originally proposed, which would have cost about 13% of the company’s Brazilian workforce their jobs.
“The agreement shows that we can find fair solutions even in difficult times,” Wolfgang Bernhard, head of Daimler’s commercial vehicle unit, said in the statement.
Daimler says demand for trucks and buses in Brazil, South America’s largest economy, plunged 44% in the first half of the year. Brazil’s economic contraction is forecast to continue until at least 2016.
Daimler already has shrunk its Brazilian workforce by about 3,000 jobs under a two-year reorganization, primarily through voluntary severance agreements.
The company operates two truck- and bus-building plants in Brazil and is setting up a factory to start making passenger cars in the country next year. It employed about 12,000 people in the Latin American country at the end of 2014.
