Renowned truck manufacturer Daimler AG has decided to stop its planned 1,500 job cuts that were revealed last week and would have impacted its Brazilian manufacturing unit, instead deciding to cut down on the work hours by 20 percent.
Brazil, the largest economy and auto market in South America has been going through one of the worst recessions in decades and demand across the board has shown no signs of improvement. The new deal made with the truck maker’s local unions is also guarantying the jobs for another year, until August 2016, with the Brazilian state ready to reimburse the employees for around 50 percent of their wage losses, according to a recent statement issued by the Stuttgart, Germany-based group. Daimler’s factory in Sao Bernardo do Campo had seen the workers enter a strike after the original proposal to cut 1,500 jobs was delivered – as the plan called for around 13 percent of the company’s Brazilian workforce to become jobless. “The agreement shows that we can find fair solutions even in difficult times,” commented in the statement Wolfgang Bernhard, chief of Daimler’s commercial vehicle division.
In Brazil, the market for trucks and buses has dropped 44 percent during the first six months of the year, said Daimler and the economic backlash has been predicted to last until at least the first part of 2016. The company already cut its Brazilian headcount by around 3,000 following two-year reorganization, mainly using voluntary severance deals. Daimler has two assembly facilities that build trucks and buses in Brazil and is also constructing a new plant tasked to produce passenger cars starting next year.