SAO PAULO: Volkswagen AG will furlough about 1,000 workers at its largest factory in Brazil, union representatives said on Thursday, due to weaker economic growth and slumping exports to Argentina.
The month-long furlough will start Aug. 21 at the VW plant in Sao Bernardo do Campo, on the outskirts of Sao Paulo, according to the local metalworkers union.
The factory produces the Jetta, Saveiro and Polo models, along with its Virtus sedan variant, and employs about 8,000 workers.
The news was first reported by newspaper O Estado De S. Paulo on Thursday. A Volkswagen representative declined to comment immediately on the matter.
A truckers’ strike in late May took the wind out of a gradual economic recovery in Brazil, weighing on domestic demand. Slower sales in Mexico and Argentina also led Brazilian automaker group Anfavea to scrap a forecast for exports to grow this year.
Furloughs are common as an alternative to costly job cuts in Brazil’s auto industry, allowing carmakers to trim production and payroll more easily when demand softens.