General Motors has finished reaching an agreement with workers at its São José dos Campos plant in Brazil to reduce labor costs and allocate a new vehicle to the factory. The agreement is part of a plan that seeks to improve the fitness of GM’s business in the country, while guaranteeing R$5 billion (about $1.33 billion USD) for the plant to produce the next-generation Chevrolet S10 mid-size pickup.
In a rather unusual turn of events, the announcement was made in a statement by the plant’s workers union. A GM Brazil spokesperson merely said that “negotiations with the union and officials of the GM factory in São José dos Campos concluded successfully.”
After six rounds of rather intense negotiations spanning the course of two weeks, the majority of the 4,000 workers at the GM São José dos Campos plant approved a list of austerity proposals requested by GM in exchange for the allocation of the new vehicle.
Among the approved proposals is reduction of inflation-based salary adjustments, a reduction of the base salary for new hires, and the introduction of new production shifts to increase productivity.
This investment in the GM São José dos Campos plant to produce the next-gen Chevrolet S10, which also includes provisions for the S10-derived TrailBlazer SUV, represents half of the R$10 billion ($2.66 billion) allocated by GM to invest in Brazil between 2020 and 2024. The remaining $1.33 billion is earmarked for the other major GM Brazil facility – the the GM Sao Caetano do Sul plant, which is expected to produce the next Chevrolet Tracker and a future small, car-based pickup, likely the replacement of the South American-market Chevrolet Montana.
Last month, GM announced that its upcoming investment cycle in Brazil is subject to a restructuring program that makes the unit more financially viable. For that reason, the company opened negotiations on January 21st with dealers, suppliers and plant employees to reduce costs and improve the operating fitness of the South American business unit. In addition, GM is also in talks with the state government of São Paulo to obtain tax credits and concessions.