Brazil: GM lifts lockout at Sao Jose dos Campos plants, Union meet planned next week image

General Motors says production in Brazil at its São José dos Campos complex has resumed after a one-day shutdown was ordered because of fears of an unspecified job action by a local union.

The company will meet local union on Aug 4 together with government officials to find a way to deal with slipping demand for the cars produced in Brazil.

GM produces motors, transmissions, pickup trucks and car kits for export at Sao Jose dos Campos, but its passenger-car assembly line could be shuttered as demand falls for the models produced there.

Last week, the US automaker insisted it had made no decision on layoffs or on shutting down production at the struggling line in Sao Jose dos Campos, a city of 640,000 people located 80 kilometers from Sao Paulo. The municipal government sent police to the site to prevent acts of vandalism during the negotiating process.

The metalworkers’ union wasn’t immediately available to comment.

In response to flagging sales in the auto industry, Brazil’s government cut taxes on auto sales in May and eased reserve requirements for banks issuing auto loans.

In exchange for the stimulus measures, which are set to expire at the end of August, the government demanded that companies not reduce employment levels.

Sales in Brazil through the end of June were down 1.2% from 2011 levels, and production was 9.4% lower than at the same time last year.