General Motors warns workers in Brazil on losses

General Motors has cautioned employees in Brazil that recent investments there depend on a painful strategy to return to profit in the nation, according to a memo observed by Reuters on Saturday.

In a message posted at Brazilian plants, GM’s top executive in Brazil and Argentina, Carlos Zarlenga, stated after running up a heavy loss over the last three years the operation had reached “a critical moment that will require sacrifices from everyone.”

The memo referenced comments that CEO Mary Barra made during investor presentations about challenges in South America. “We are not going to keep deploying capital to lose money,” she stated, in a quote repeated by Zarlenga.

GM representatives in Brazil did not immediately discussed on the memo, which was first reported by newspaper O Estado de S.Paulo.

The dire tone came as a shock to some employees in Brazil, where GM has overtaken Volkswagen and Fiat Chrysler Automobiles to become the industry sales leader as the economy rebounds gradually from a deep slump.

Union leader Renato Almeida referred GM’s statement as “absurd.”

“The company is going through a good moment in Brazil,” stated Almeida, vice president of a metalworkers union in Sao Jose dos Campos. “There is no justification for them to suggest they would shut down operations.”