Volkswagen Brazil to Close Main Plant If No Agreement Is Reached

Volkswagen has warned it will close down its main factory in Brazil if an agreement is not reached with the unions on a restructuring plan which contemplates leaving 6.000 workers redundant.

The German manufacturer said that if the restructuring plan is not implemented the Anchieta plant in São Bernardo do Campo is condemned.

"Without an agreement Anchieta will not have the necessary conditions to compete for new investments, which would make it unviable in short term operations", reads a document from the company.

The restructuring plan announced last May includes the elimination of 5.773 jobs by 2008 out of a payroll of almost 22.000 in five plants Volkswagen has in Brazil.

The company warned the unions that if no agreement is reached, the decision will become effective next November 21 when the current job stabilization understanding expires.

Anchieta in the company’s main plant in Brazil dating back to 1959 and manufactures automobiles and light trucks.

The elimination of jobs is "inevitable" because of the strong appreciation of the Brazilian currency, real and an overall increase in costs.

Unions are scheduled this week to take a vote to decide future actions which have lately included stoppages and other protests.

Volkswagen also has two other manufacturing plants in Taubaté and São Carlos in São Paulo state, plus another two, one in Rio de Janeiro and another in Paraná.

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