Volvo Trucks, the world’s second largest heavy-duty truck maker will cut 208 jobs at a factory in Brazil in response to low sales and weaker economic forecast, Reuters reports.
The company will not renew short-term contracts for 155 workers and will lay off another 53 at a plant in the state of Parana where it makes engines and transmission components.
The announcement comes after Mercedes-Benz said last month it will lay off 1,500 workers at a Brazilian truck factory for up to five months because of declining production.
Brazil’s auto industry is the country’s largest manufacturing sector.
In April, the unsold inventory of Brazil’s automobile industry reached its highest level since November 2008. Truck purchases speeded up last year before stricter motor emissions standards came into effect.
Inventories in Brazil’s auto sector amounted to 43 days’ worth of sales last month, according to the national automakers’ association, Anfavea.That was the highest level since November 2008, when stocks reached 56 days of sales.
Banco Volkswagen, the biggest bank focused on Brazil’s auto industry, told Reuters last month it was approving new loans at half the pace of recent years as it sets aside more cash to cover possible defaults.
Industrial production fell in May for a third-consecutive month, retreating a seasonally adjusted 0.9% compared with April, the Brazilian Geography and Statistics Bureau, or IBGE, said last week. The May production slide was greater than the median estimate of a 0.70% decline from analysts polled by the local Estado news agency.
Strike at Volvo
Around 4,100 metalworkers at Volvo in Curitiba, Brazil, went on strike for an indefinite period on the morning of Tuesday May 15 after pay talks stalled. The workers decided to take the measure at an assembly organised by the Greater Curitiba Metalworkers’ Union, affiliated to the CNTM/FS, a metalworkers’ confederation affiliated to the IMF.
Volvo’s plant in Curitiba, Brazil, is the company’s main unit in Latin America manufacturing trucks, buses and diesel engines for the entire South American market.