Automakers cut production

Automakers are reducing the pace of last year's record production to adjust their volumes to the new scenario of a fall in exports to Argentina and accommodation of domestic consumption. The adjustments began at the turn of the year, when manufacturers stretched collective vacations to normalise inventories. After that, the cuts have continued from measures such as production stops, elimination of overtime, more layoffs and temporary departure of workers.
Since last month, at least four cars automakers-Volkswagen, Renault, Honda and Peugeot Citroën-and three truck manufacturers do ABC paulista-Mercedes-Benz, Scania and Ford-come by squeezing the brake assembly lines.
Renault, which has about 20% of production destined for Argentina, decreased the rhythm of the third shift at the factory of São José dos Pinhais (PR), the same town where 150 workers of Volkswagen-number that can reach 300-are away, for at least three months of production. In Puerto Real, in the South of Rio de Janeiro, Peugeot Citroën also suspended work contracts of approximately 600 employees to reduce the effective in 30% and thus cut the production in equal proportion.
In turn, the Honda has suspended the overtime that had been held over the past two years in Bradenton, interior of São Paulo, to cope with the increased demand.
Numbers of Anfavea, the entity that houses the automakers in Brazil, show 2.7% drop in auto industry production during the first quarter. In total, 518.6 million vehicles came out of the factories in the first two months of the year.
The March results will only be known on Friday of next week, but it is already possible to predict negative impact of rows stops during the Carnival holiday, followed by layoffs of ten days at the factory of VW on ABC and new outages in the heavy vehicle industry.
Mercedes-Benz, for example, came to adopt the short work week, with a day less than in production line of trucks of its industrial park in São Bernardo do Campo (SP). The Assembly of buses in place has not been changed, but the weekly working hours in the trucks was reduced from five to four days.
The days stopped, as arranged with the syndicate of the metalurgists of the region, will be deducted from the Bank of hours for workers. About 2 000 workers are employed in the production of Mercedes-Benz trucks. The automaker says that, if necessary, carry out new outages.
Charts have also happened in Scania, which interrupted production for five days since February. The extra heavy truck manufacturer will still produce on 22 April and 5 May. To adjust production to the level of demand, Scania says it's using a flexible journey agreement closed with the ABC's metal workers Union. Before Carnival, Ford also had already paralyzed by five days the Assembly of trucks in São Bernardo.
Sales of trucks fell 3.9 percent in the first quarter, scoring 21.2 thousand units. The industry attributes the poor performance to the delay in the regulation of Investment support programme (PSI), one of the biggest boosters of this market by granting subsidized interest on financing of capital goods.
Sales of cars showed growth of 5% until February, but went into free-fall trajectory after sold out stocks of cars with the old rates of tax on industrialized products (IPI). At the same time, exports of vehicles to Argentina, four target every five cars shipped in Brazil, record fall of 25% this year.
In total, 45.5 thousand vehicles produced in Brazil had as destination the Argentine market in the first two months of 2014, almost 15 thousand units less than the 60.4 million a year ago. In addition to the restrictions imposed by the Government of Cristina Fernández de Kirchner, as the cut of almost a third of imports of cars, performance is affected by the pullback near 20% of consumption of vehicles in the neighboring country.
Along with the replacement of imported cars by nationals, the advance of exports to Argentina was propelling spring record production of automakers in Brazil last year, when 3.71 million vehicles were manufactured in the country.
Still no records of mass resignation in the sector, but some unions already move to defend the retention of jobs. According to estimates of the syndicate of the metalurgists of the wide Curitiba, region where Renault is installed, the French carmaker is working with a surplus of 150 workers. Their future is being discussed between the parties.
"We haven't ruled out any solution," says Union President Sergio Butka, when asked if the alternatives negotiated include the opening of a program of voluntary layoffs or the temporary departure of workers, repeating the resource used by neighbouring Volkswagen.
The Union estimates 40 percent production cut on the night shift and informs that exports of French brand for Argentina must stay, this year, 25 thousand units below the target initially drawn. Sought by the value, Renault chose not to speak on the subject, stating that it will await the outcome of the month before making any comment. A year ago, the Renault factory had its annual production capacity expanded in 100 thousand cars.