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  HOME | Business & Economy (Click here for more)

GM Brazil Puts 900 Workers on Paid Furlough

SAO PAULO General Motors said on Thursday that it put 900 workers at two of its Brazilian plants on paid month-long furlough to "adjust production" in the face of slumping sales.

A third of the furloughed employees are from GM's biggest facility in Brazil: the assembly plant in the Sao Paulo suburb of Sao Caetano do Sul that generates work for some 6,000 people in the metropolitan area.

The rest of the furloughs apply to the GM do Brasil factory in Sao Jose dos Campos, about 100 kilometers (60 miles) from Sao Paulo.

All 900 of the furloughed employees will return to work in 30 days, a company spokesman told Efe, though adding that the scope of GM do Brasil's production cuts would not be announced until sometime next month.

GM has already announced it will not renew the contracts of 1,633 temporary workers at the Sao Caetano do Sul plant that start to expire in late March.

The company stressed that it has not laid off a single permanent employee in Brazil despite the steep plunge in domestic vehicle sales.

Figures from the Fenabrave industry association show that sales were down 6.74 percent last month compared with January 2008, marking some improvement from the drops of 16.39 percent and 23.44 percent in December and November, respectively.

November's sharp decline prompted the Brazilian government to cut sales taxes and vehicle registration fees and to provide extra liquidity to banks and other institutions that make auto loans.

Fearing layoffs, unions representing autoworkers in Sao Paulo state, Brazil's industrial heartland, agreed to pay cuts in exchange for employers' promise to preserve 16,300 jobs in the auto sector.

Brazil's official unemployment rate rose to 8.2 percent in January as some 340,000 workers lost their jobs, the IBGE statistics agency said last week.

The total number of people out of work reached 1.9 million, according to the IBGE's monthly report on unemployment, which is based on figures from the country's six major metropolitan areas: Sao Paulo, Rio de Janeiro, Belo Horizonte, Recife, Porto Alegre and Salvador.

Statistics compiled by the Labor Ministry indicated that Brazil's formal economy lost 101,748 jobs last month.

The ministry pointed out, however, that while jobs losses are always bad, the figure represented a big improvement from December, when 654,946 people entered the ranks of the unemployed in Latin America's biggest economy.

Brazil's industrial production was down 12.4 percent in December from the previous month and off 14 percent compared with December 2007, the biggest one-year drop since the government started collecting data. EFE

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