Volkswagen is temporarily laying off about 900 workers at its Anchieta plant near São Paulo due to slow sales, according to the local workers union.
The company told the union the furloughs are the result of weak demand for its vehicles and the phaseout of two of its assembly lines, said a union representative who asked not to be identified because she isn’t authorized to speak publicly.
The layoffs could last five months and the workers will continue to draw full salaries, the union representative said.
The Anchieta plant is located in São Bernardo do Campo, about 18 kilometers south of São Paulo. It produces the Novo Gol, Polo, Polo Sedan, Saveiro and Saveiro Cross models, according to Volkswagen’s website.
Volkswagen confirmed in an email it will furlough workers at Anchieta and at an additional factory in the city of São Jose dos Pinhais, in the southern state of Paraná.
The company said the layoffs are needed to “adjust itself to the current market demand.” The company declined to give more details.
In the email, Volkswagen reaffirmed its commitment to a previously announced plan to invest 10 billion Brazilian reais ($4.45 billion) through 2018 aimed at developing new products and modernizing its Brazilian plants.
Volkswagen’s São Bernardo do Campo plant was the company’s first factory built outside of Germany, according to its website. Opened in 1959, it is the largest Volkswagen factory in the country, employing some 12,000 workers.
Volkswagen and its São Bernardo union signed an agreement in 2012 that guarantees employment for union workers until 2017.
Workers laid off at Anchieta will have part of their salaries paid by a government fund and the rest by the company, according to the union.
Automobile sales in Brazil fell 15.2% in March compared with the same period a year ago, according to the Brazilian auto maker association Anfavea.
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