Daimler AG said it was cutting another 1,500 jobs at a plant that makes trucks in Brazil in response to a slump in demand in the country, leading workers to declare an open-ended strike at the factory.
The affected employees at the Sao Bernardo do Campo factory near Sao Paolo were notified on Friday, a spokesman for Daimler said on Monday.
About 7,000 workers voted to strike at an assembly on Monday, according to the local metalworkers’ union.
Photo: Reuters
Brazil’s truck market has been on the slide since early 2013, as a weak economy, high inflation and tough financing conditions have curbed investments in commercial vehicles.
Daimler has cut about 3,000 jobs in Brazil in that time, shrinking its workforce in the Latin American country to 11,854 by the end of June. It has more than 280,000 employees around the world.
Earlier this month, the group said it still had about 2,000 excess workers at the Sao Bernardo do Campo plant, which had been running at less than 60 percent of capacity.
However, Daimler has pledged to keep up its investments in China after the country’s biggest stock market rout since 2007.
“I am still positive, subject to some stabilization of the stock market,” Daimler China head Hubertus Troska told reporters in Beijing on Monday. “I am still confident Daimler will sell significantly more than 300,000 units in China this year.”
Daimler is to plow ahead by investing more in compact cars in a market where the automaker has been adding dealerships as it expects vehicle ownership levels to rise, Troska said.
The slump for Chinese equities poses a risk to the Mercedes-Benz parent’s ability to keep up the pace of sales growth that pushed the brand’s sales ahead of BMW AG and Volkswagen AG’s Audi last month.
Demand for the C-Class sedan and Mercedes compacts boosted China deliveries by 22 percent in the seven months through last month, putting the carmaker on track to exceed its annual sales goal in the world’s biggest auto market.
China this month devalued its currency to combat an economic slowdown, creating a further challenge for German luxury carmakers. The policy shift reduces the value of the automakers’ repatriated earnings from the country and increases the costs of imports.
Daimler has said the currency devaluation is to have a “slight” effect on profit this year.
Additional reporting by Bloomberg
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