March 18, 2020 / 5:47 PM / 19 days ago

GM to furlough all workers in Brazil on March 30, suggesting production stop

The GM logo is pictured at the General Motors Assembly Plant in Ramos Arizpe, state of Coahuila, Mexico October 7, 2019. REUTERS/Daniel Becerril/Files

(Reuters) - General Motors Co will furlough all its employees in Brazil starting on March 30, the company said in a statement to Reuters on Wednesday, suggesting that GM’s production in South America’s main car market would stop due to the coronavirus outbreak.

Brazil’s automakers had been bracing for a potential breakdown in its parts supply chain from China starting in April that could disrupt production. But GM did not mention chain supply issues in its statement, instead pointing that it was furloughing workers to “align production to market demands.”

GM’s Chevrolet is Brazil’s best-selling car brand and the company’s decision could potentially lead other large Brazilian automakers to furlough and halt production themselves.

A union source representing some of GM’s workers in Brazil said they would have liked for the company to furlough workers sooner to protect their health.

The source said the furlough would in principle last from March 30 through April 12 and workers will be paid in full, in accordance with Brazilian law. He said the agreement had yet to be formalized, but is expected to be signed later in the day.

Reporting by Marcelo Rochabrun; Editing by Andrea Ricci

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