Volkswagen (VW) is ending the third shift at its plant at Sao Bernardo do Campo, Brazil, from 6 July, according to regional media reports. The report says 1,800 staff currently work at the facility and that some lay-offs are expected. However, the labour union at the plant has requested that VW refrain from further lay-offs prior to publication of a government plan aimed at saving jobs, which is due soon. Separately, VW is reported to have suspended 450 workers at its transmission plant in Cordoba, Argentina. The workers are to be idled from 9 to 19 July, and will receive 75% of their gross wages during that time.
Significance: At the Sao Bernardo do Campo facility, VW makes the Gol and the Saveiro, and is due to add the Jetta and Saviero Van this year. Amid declining vehicle sales in Brazil and Argentina, IHS Automotive forecasts the plant's production will fall from 289,433 units in 2014 to 227,600 units in 2015. The production decline is forecast to continue until 2018, with the plant increasing output to 324,000 units in 2020. VW's Cordoba transmission plant supplies plants in Europe and North America as well as South America. The plant employs 1,200 staff, with the lay-off impacting about 38% of the workforce. The plant's transmissions are used for the Spacefox, Fox, Gol, Polo, Saveiro, up!, Golf, Polo, Beetle, Jetta, and the US-built Passat, as well as the Seat Altea, Ibiza and Leon. However, according to the IHS Automotive transmission forecast, 67% of production is supplied to VW's Brazilian plants, and VW's vehicle output is forecast to decline 17% in 2015, compared with 2014. In 2016, Brazil will receive 75% of the Cordoba plant's output, which is forecast to decline from 894,934 units in 2014 to about 670,000 units in 2016. The plant's output is forecast to increase to 781,000 transmissions in 2019, as the plant's dependence on Brazil is forecast to increase to 78%. With the Brazilian and Argentine markets declining, the need for the transmissions is falling and the company looks to be adjusting production to demand. Reportedly, the plant's assembly of transmissions destined for Germany and Spain will continue.
