Workers at a Volkswagen AG factory in Brazil voted on Friday to end a 10-day strike after the carmaker agreed to reverse layoffs of 800 employees and presented a new labour deal through 2019. Volkswagen said it would cut costs instead through voluntary buyouts and the end of some third-party contracts. With the labour deal in place, the carmaker plans to begin producing vehicles soon based on a new global platform at the plant on the outskirts of Sao Paulo.
Union representatives said a new accord with the company provided for annual salary increases of 1 percent plus inflation instead of one-time bonuses the company offered last year. VW declined to comment on the details of the wage deal. Production will resume on Monday, the local metalworkers union said, ending a stoppage that began January 6 to protest the layoffs. The cutbacks, along with around 250 at a nearby Daimler Mercedes-Benz plant, led to union protests that closed down part of a highway outside Sao Paulo this week and turned up pressure on President Dilma Rousseff.
Her restraint in the latest labour stand-off contrasted sharply with ones in recent years, when protests by unions closely aligned with her Workers' Party led her to explicitly warn against layoffs in exchange for ongoing tax breaks to help the struggling industry. Rousseff's new economic team took office this month pledging an end to such favouritism and targeted stimulus in a push to restore fiscal discipline and improve the competitiveness of Brazil's stagnant economy.