Brazilian auto industry sees huge cuts

The Brazilian Ministry of Labour estimates that the sectors of the economy linked to the automotive industry have cut an estimated 38,700 jobs in the first half of this year, which corresponds to 11% of all layoffs in the period.

The survey includes jobs related to the manufacture and sale of automobiles and auto parts, and also jobs in gas stations, though it does not consider metallurgy and steel industries.

Of the 15 segments listed, only 3 car battery makers, gas stations and mechanics have opened positions.

Automotive trading was one of the sectors to have cut the most jobs. They were 12,200 in total, nearly a third of the total.

Nevertheless, manufacturers of auto parts and accessories exceed this number when considering the number of cut positions in all subsectors, over 13,000.

The regions most affected, in absolute numbers, are the states of São Paulo and Minas Gerais.

Pernambuco state, where a new automotive hub is being installed, was one of the few places to have created jobs.

Luiz Moan, president of Anfavea (the Manufacturers’ Trade Union), attended the hearing in the lower House of Congress to discuss employment in the sector and said that manufacturers have given their contribution to try to avoid an even worse scenario, by promoting collective vacations and ‘lay-offs’ (employment contract suspension) and work with high inventories.

He also reiterated that some automakers will join the PPE (Employment Preservation Plan), which sets out to reduce working hours and wages.

From January to July, industry production plunged 18.1% compared to the same period in 2014, the worst result since 2006.