General Motors and Mercedes Benz will give leave to all employees in Brazil later this month, the companies stated, suggesting that production in South America’s main auto center will be largely impacted by the coronavirus outbreak.
Brazil’s automakers had been readying for a potential breakdown in its parts supply chain from China beginning in April that could disrupt production. But neither discussed supply chain issues in their statement.
Automakers are stopping production at plants across Europe as they grapple with coronavirus and declining demand.
GM stated it needed to “align production to market demands”. Mercedes, owned by Daimler, stated it wanted to avoid the spread of the coronavirus.
GM’s Chevrolet is Brazil’s best-selling car brand and the automaker’s decision could potentially influence other large Brazilian automakers to furlough and stop production.
Mercedes is concentrating on heavy truck production in Brazil, where it is the market leader.
A union source representing some of GM’s employees in Brazil stated they would have liked for the company to furlough employees sooner to protect their health.
The source stated the furlough would last March 30 through April 12 and employees will be paid in full, in accordance with country’s law.
Mercedes said its furlough will start from March 25 and end on April 19.
