General Motors is looking to buy out its employees in Brazil as its South American business continues to face challenges due to the COVID-19 pandemic.
According to a new report from Reuters, the local labor union in Brazil says GM has begun to offer buyouts to some workers as it plans to reduce the size of its workforce in the country due to dwindling sales and market instability. The union has yet to vote on the proposed buyout program, though Reuters says GM wants to offer it to “all employees.”
Additionally, the union said that GM plans to extend temporary furloughs by two more months. The automaker placed some Brazilian employees on temporary furlough earlier this year toward the start of the pandemic and planned to bring them back in September, but they will now not return to work until November at the earliest.
Last year, GM CEO Mary Barra indicated the company’s South American business was in a tough spot, saying the automaker is “not going to keep deploying capital to lose money,” in Brazil and elsewhere in the region.
As of this writing, Brazil had 3.12 million confirmed cases of COVID-19, along with 103,000 deaths and 2.24 million recoveries. According to data obtained by John Hopkins University, nearly half of all COVID-19 related deaths recorded in Latin America and the Caribbean have been in Brazil.
GM currently operates five production plants in Brazil, the largest being its Gravataí plant in the southern state of Rio Grande do Sul. The Gravataí facility builds the Chevrolet Onix hatchback and sedan, which is also the best-selling vehicle in the country. The Gravataí plant recently celebrated its 20th anniversary after first opening its doors on July 20th, 2000.
Brazil is the largest automotive manufacturing center in South America and, in addition to GM, serves as an important base for major automakers including Volkswagen, Ford and Fiat Chrysler.