Auto workers march in Brazil

Weekly News Update on the Americas, Issue #411, 14 December 1997

More than 30,000 people, mainly auto workers, marched on Dec. 11 in Sao Paulo, Brazil, to protest the central government's economic policies and to defend their jobs. The protest was called by the leftist Only Workers Central (CUT); it was held in San Bernardo, an industrial zone of the greater Sao Paulo area where most of the automotive factories are located.

Workers from the Volkswagen, Ford, Toyota and Mercedes-Benz factories converged on San Bernardo's municipal park to protest a series of austerity measures imposed on Nov. 10 and the Central Bank's decision to bring interest rates up to an annual 40% in the wake of stock market losses sparked by an economic crisis in Asia [see Updates #404, 408]. The measures have led to a sharp drop in automobile sales.

Workers Party leader Luiz Inacio Lula da Silva spoke at the protest, blaming the central government for the economic crisis and demanding that authorities lower interest rates. However, Lula said that the CUT was willing to accept a reduction in workers' salaries for three months if business owners would commit to guaranteeing job stability for a year. Lula criticized Union Force, a center-right labor organization, for having made agreements with factory owners to reduce salaries, currently $340 a month, by 10%. [Clarin (Buenos Aires, Argentina) 12/12/97]

On Dec. 9, unions representing workers at some 500 auto parts suppliers in Brazil signed a pact with company owners accepting reductions of up to 10% in salaries and 25% in hours beginning Jan. 1; in exchange, the owners promised that the workers can keep their jobs until May 31, 1998. The pact was arranged by Union Force and the Union of the Automotive Vehicle Component Industry (Sindipecas). We are making this agreement because it is the least evil we have found, Union Force president Luis Antonio de Medeiros explained on Dec. 10 in Sao Paulo. Today those who lose their jobs won't find others because there are simply no jobs, and if they are over 50 their useful life is over and they'll have to leave Sao Paulo, said de Medeiros. While the pact theoretically covers the entire auto parts sector, individual companies were not bound to sign it; on Dec. 10 union sources reported that the muffler factory Cofap had decided not to sign and had already begun layoffs. Sindipecas lawyer Drausio Rangel said he believed 75% of the auto parts companies would honor the agreement. [Notimex 12/9/97, 12/10/97]

The agreement was made just days after auto workers rejected similar proposals from Volkswagen and Ford. Volkswagen Brazil had proposed that its workers accept a 20% reduction in salaries and hours to avoid the layoffs of 10,000 of its 23,000 workers in San Bernardo. On Dec. 10 Ford Brazil announced a 33% decrease in production for the first half of 1998, and proposed a plan of voluntary retirement which, according to the unions, could affect 1,200 surplus workers. The layoff trend is also spreading into the electrical appliance manufacturing sector: businessperson Afonso Hennel of the SMP-Toshiba firm announced that the sector will reduce personnel 25% beginning on Jan. 1. [Clarin 12/12/97; Notimex 12/9/97]

On Dec. 9 the powerful Sao Paulo Industrialists Federation and the National Industry Confederation (CNI) announced that 16,300 jobs were lost this past in November in Sao Paulo. [Clarin 12/10/97] Days earlier the Inter-Union Department of Statistics and Socio-Economic Studies (DIESSE) had reported that unemployment in the Sao Paulo metropolitan area had reached a record 16.5% of the economically active population. [Clarin 12/10/97; News from Brazil supplied by Servico Brasileiro de Justica e Paz (SEJUP) #295, 12/4/97]