July 24, 2012 / 3:38 PM / 5 years ago

GM halts Tuesday production at Brazil factory because of strike

* Tension at one assembly line leads to day off for entire factory

* GM plans to continue talks with union, government representatives

* Company won’t say whether suspension could last beyond Tuesday

By Alberto Alerigi

RIO DE JANEIRO, July 24 (Reuters) - General Motors suspended production for the day at one of its factories in Brazil, where workers on one assembly line have gone on strike after a slowdown in sales of some vehicles, the automaker said on Tuesday.

The factory, in the Sao Paulo suburb of Sao Jose dos Campos, will be closed Tuesday, GM said, as the company moves ahead with its review of production and ongoing talks with labor leaders over the troubled assembly line, one of eight at the site.

GM declined to comment on whether the suspension would last more than one day.

Although the assembly line in dispute employs only a fraction of the 7,200 workers at the factory, GM said it had given the day off to all of them because talks with the union in recent days have grown increasingly heated.

“It’s a delicate moment,” GM said in a statement, adding that the company “prefers not to expose its workers to possible incitement and provocation.”

Automakers across Brazil, Latin America’s biggest car market, are struggling with flagging sales after years of record growth. Brazil’s economy, which grew by an annual average of more than 4 percent during much of the past decade, has stagnated in recent quarters because of the crisis in Europe and economic uncertainty worldwide.

Earlier this month, GM ended production of one of the four vehicles it made on the assembly line in question. Since May, about 350 of the 1,500 workers on the line have accepted buyouts.

Other employees of the line have been striking, however, as the company determines whether or not to continue with the production of the other three vehicles. In a telephone interview last week, Luiz Moan, GM’s head of institutional relations in Brazil, said the company would determine the fate of the assembly line by the end of the month, after reviewing July sales data.

In a statement, the Metalworkers Union of Sao Jose dos Campos called Tuesday’s suspension “undemocratic” and said it violated Brazilian laws that prohibit lockouts by employers.

“This behavior only increases the insecurity for workers and makes clear the manufacturer’s intention of a mass layoff,” the union said.

GM said planned talks with the union and government representatives were scheduled to go ahead on Wednesday.

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