Mercedes cuts jobs in Brazil

Mercedes-Benz has announced that they have cut 10 per cent of their workforce in Brazil. The news may come as quite surprising especially considering that Brazil was one of the best performing car markets in the world at present. Mercedes-Benz is also Latin America’s largest supplier of commercial vehicles.

Major slowdown
However the situation has changed somewhat in Brazil recently. There is a major slowdown in the country leaving Mercedes-Benz no choice but to release a chunk of their workforce.

5 Months of training offered
In total 1,500 employees were released. They are said to receive 300 hours of professional training in the next five months. Their wages would be paid from the state – mandated workers’ support fund which Mercedes-Benz pump money into.

Reducing the excess labour
An official statement from Mercedes-Benz read that the action was taken in order to “Reduce the impact on employees of an excess of labour that was the consequence of a fall in the market for trucks and buses”.

Is Brazil still on course for that number 3 spot?
Brazil are predicted to become the world’s number three car market in the world, knocking off Japan and flagging just behind the United States and China. The health of the countries automotive market has a huge question mark hanging over it at the moment, with many doubting it’s credentials compared to one year ago.

The Vice President of Human Resources, Fernando Garcia Fontes said “Mercedes-Benz of Brazil has a strong production presence in the country with its three factories and over 14,000 employees so we sought a solution that would maintain the same level of employment,”

The state of Brazil’s overall economy is largely to blame. Many loans have been taken out with payments being kept up. This has in effect has the manufacturing sector slowing down and effecting the car industry in the worst possible way.

The Brazilian Government is playing it’s part in helping to revive the automotive industry. They released a $10 billion stimulus package which is will have a chunk dedicated to assisting the automotive industry.

Banks have been recently been refusing to give credit as car sales have dipped dramatically as has the economy. April saw a dramatic fall of 14.2 per cent when compared to March car sales. Mercedes-Benz bus and trucks have felt the effects of the dipping economy more than most.

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