GM could have Brazilian workers on paid leave image

According to an auto union, General Motors would move to address declining sales in Brazil, Latin America’s largest economy, by taking off the job almost a fifth of its workers at a car plant.

The employee union sees the move as “unnecessary,” as the automaker wants to have on paid leave around 1,000 from the total of 5,200 employees working in a factory located in São José dos Campos, Sao Paulo state. The automaker and the union are likely to meet to negotiate the proposal on August 1.

National automakers’ association Anfavea is forecasting 2014 could see a 5.4% decline in sales and the local output of cars, trucks and buses could fall 10% – the worst slump in 16 years. The carmakers’ decision to lower the employee base is the most common move to protect profits as Brazil – for years seen as a beacon of light amid falling global demand – begins to falter, while the usual export partner, Argentina, is also seeing weaker demand.

Back in 2012 General Motors already had 940 workers at the same manufacturing facility on paid leave, with the union claiming 598 were later on laid off. The plant used to make models that have been axed since, like the Meriva and Zafira – and it only makes S-10 trucks and engines now.

Back in May, Volkswagen and PSA Peugeot Citroen also started job cuts, with the German automaker having 900 workers on paid leave and the French starting a voluntary leave program.