At the same day that Brazil’s Minister of Finance Guido Mantega announced measures to stimulate the auto industry, two major manufacturers of trucks, Mercedes-Benz and Volvo, announced a temporary suspension of production.

Yesterday, Mercedes-Benz suspended all production at its factory plant in Sao Bernardo do Campo (SP). The approximately 7,000 assembly line workers will stay home for at least a week. This SP plant produces about 300 vehicles per day, though activity slowed down in the last few months. A group of 480 workers agreed to get paid leave for a month.

As for Curitiba-based Volvo, which was recently pressured by the unions to increase perks and bonuses to its own workers, it will offer paid time off to 1,300 employees for about two weeks in June, a period where its “100 trucks per day” production activity will be halted.

The two automakers claim they need to match their production activities with demand. Sales of trucks have been on decline since the beginning of the year. The measures announced yesterday by Mantega include incentives by the state-development bank BNDES to financing purchases of trucks.

Sales of cars and light commercial vehicles are also in decline, and automakers blame the lack of credit for financing which were harmed by higher default rates which in March reached a record 5.7%. Volkswagen and Fiat have already cut down working days in the last two weeks as well.

Source: Estadao

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