Brazil's Embraer says most staff working at Sao Jose plant despite strike

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SAO PAULO (Reuters) - Brazilian planemaker Embraer EMBR3.SA said on Tuesday that around 80% of staff at its plant in Sao Jose dos Campos were working, challenging an earlier statement from the city's metal workers' union saying the strike had halted production.

Embraer shares traded down 3.7% on the day, underperforming the broader Brazilian stock market and on track for their biggest fall in six weeks.

In a statement, Embraer said “most employees” did not go on strike, and that “all production and administrative areas of the unit are operating with about 80% of their teams.”

The plant employs nearly 8,000 people, including production and administrative staff, according to the company. Embraer did not specify how much production had been lost, if any.

The union said that this was the first stoppage at the factory in five years, and that the strike would last “indefinitely.”

Workers are demanding a real-term salary increase - one that exceeds the rate of inflation - which they have not received over the past four years, the union said.

Embraer workers have rejected the company’s proposal to adjust salaries corresponding to inflation at the rate of 3.28%and are demanding a 6.37% pay rise, the union said.

Embraer shares fell 3.7% to 18.39 reais on Tuesday, their biggest fall since Aug. 14 and underperforming the broader Bovespa index .BVSP which was down 1%.

On Monday, shares in the company fell 2% after Reuters reported that the European Union is to launch an antitrust investigation into Boeing's BA.N bid for a controlling stake in Embraer's commercial aircraft arm.

Reporting by Paula Laier; Writing by Ana Mano and Jamie McGeever; Editing by Bernadette Baum and Rosalba O’Brien