GM Brazil Unit Puts 900 On Paid Leave Even As Car Sales Rise
February 26 2009 - 2:20PM
Dow Jones News
General Motors do Brasil Ltda., a subsidiary of the Detroit auto
maker, said it has furloughed workers again, putting 900 on paid
leave Thursday.
The move comes at a time when recent car sales have shown signs
of a recovery, and it could mean that corporate executives are
seeing those sales slow once again.
"All of the car makers, GM included, have to readjust somehow to
the new reality in these credit markets," said Andre Beer, a Sao
Paulo-based sector consultant who spent 15 years as a vice
president of GM in Brazil.
"Layoffs are not out of the question, but it is still too soon
for that. The recent increase in car sales is not enough to offset
the problems caused by this crazy banking crisis," Beer said about
U.S. and European bank woes.
A press officer at GM in Sao Paulo said the corporate
headquarters in Detroit wasn't pressuring its successful Brazil
office to downsize.
Across the sector, January motor vehicle sales rose 1.5% over
December, according to the National Motor Vehicles Manufacturers
Association, or Anfavea.
In the first two weeks of February, car sales rose 11.2% to
88,507 units compared with the same two-week period in January,
while pickup and SUV sales rose 37.7% to 20,751 units, according to
the National Motor Vehicles Dealership Association, Fenabrave.
Last week, GM said it was producing around 2,500 cars and trucks
daily, below 2008's peak.
Brazil has been a profit winner for General Motors Corp. (GM).
As sales have slipped in Europe and the U.S., car sales for GM in
Brazil broke records for two consecutive years.
Rivals Volkswagen AG (VLKAY) and Fiat Spa (FIAZY) said last week
that all of their workers had returned from paid leave.
-By Kenneth Rapoza, Dow Jones Newswires; 55-11-2847-4541;
kenneth.rapoza@dowjones.com