SAO PAULO -(Dow Jones)- General Motors do Brasil Ltda said it will put 10,200 workers on a paid leave of absence to reduce its stock of unsold vehicles, the company said Tuesday.
General Motors Corp. (GM) has slightly over 23,000 employees in Brazil, making the reduction a sizable portion of the company's labor force. Brazil is one of GM's most lucrative and largest markets.
Around 5,000 metal workers returned to GM Brazil's main office in Sao Caetano do Sul, Sao Paulo last week, but will be back on leave starting Dec. 22 and won't return until Jan. 10, the company's press office said.
At GM's Rio de Janeiro assembly plant, workers will be put on forced leave starting Dec. 8, and return on Jan. 5.
GM, in 2006 and 2007, had two of its best years in its 80-plus year history in Brazil. Much of the sales progress was made due to cheap and easy financing, but with banks raising interest rates and shortening term loan payments in response to the global credit crunch, Brazil's car buying craze abruptly stopped in October. National vehicle sales declined by over 10% in October and car sales fell 19% in the first two weeks of November, according to industry estimates.
At GM's Sao Jose do Cruz, Sao Paulo, industrial complex, 400 workers will go on a paid leave of absence starting Dec. 1, and won't return until Dec. 23. The facility, which is part of GM's Chevrolet S-10 and Blazer production line, will operate on one shift instead of the usual two shifts, the company said.
GM said that its sedan and mini-van production will continue on its regular two shift schedule at Sao Jose.
GM is the third largest vehicle brand in Brazil, trailing Volkswagen AG ( VLKAY) and market leader Fiat S.P.A. (FIATY) by around 10,000 units monthly.
GM sold slightly over 36,000 vehicles in October, down from 46,583 units in September.
-By Kenneth Rapoza, Dow Jones Newswires, 5511-2847-4541, kenneth.rapoza@ dowjones.com
