Brazil autoworkers fearful of future as sales slump
Autoworkers in Brazil are feeling increasingly insecure as the country’s automobile industry is mired in an economic slump that is in its fifth year of low growth.
While the International Monetary Fund (IMF) has forecast a gross domestic product (GDP) contraction of 1.0 percent this year, sales nosedived 20 percent between January and the end of April compared to the same period last year, according to manufacturers' association ANFAVEA.
Brazil’s car dealership association, Fenabrave, says 250 of Brazil's 8,000 dealers have closed their doors since the beginning of 2015, causing 12,000 jobs to be lost.
Before the sector entered its current state of slump, it recorded sales of new cars reaching 10,000 units a day in 2013. However, the following year saw a steady fall as the government withdrew several tax sweeteners from the sector.
In order to handle the crisis, major automakers present in Brazilian market such as Ford, General Motors, Mercedes and Volkswagen have forced thousands of employees to go on mandatory leave.
Manuel Domingos, like thousands of other workers at an automobile manufacturing plant outside Sao Paulo, is constantly in fear of being placed on mandatory leave and openly speaks of a "feeling of insecurity" at the Sao Bernardo do Campo plant in the Sao Paulo suburbs.
"If we are having to go on holiday, then there's something not right, either within the company or the economy," the father of two told AFP.
At present, Brazil's auto industry employs 139,580 people, which is 9.5 percent short of 13 months ago.
Last week, Mercedes Benz announced plans to lay off 500 workers and put 7,000 on mandatory leave at its plant in Sao Bernardo do Campo, a city of 800,000 people
According to media estimates, more than 10,000 autoworkers have either been placed on leave or laid off this year across the country, although ANFAVEA has no official figures.
"The auto industry depends on three factors: economic growth in general, consumer confidence and access to credit. Right now in Brazil there are difficulties on all three scores," said Stephen Keese, Latin America expert for Roland Berger consulting.
ANFAVEA hopes the situation will improve by year's end, but Keese warned that Brazil must pursue "a long-term strategy to increase its international presence, as well as greater competitiveness and less bureaucracy," while cutting logistical and tax costs.
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