GM Idles Production at Brazilian Plant

By Rogerio Jelmayer 

SÃO PAULO--The Brazilian unit of General Motors Co. said Wednesday it has temporarily stopped production at one of its plants and idled 9,000 workers, after it failed to reach an agreement on fees with two local transport companies.

GM said the suspension at its plant in Gravatai in Rio Grande do Sul state has halted the production of 1,944 vehicles since the dispute started Tuesday. The Gravatai plant, one of three the auto maker has in Brazil, produces the Onix, Prisma and Celta models.

Tegma and Transzero, the companies that transport vehicles produced at Gravatai, have been negotiating with GM over freight-fare increases. A GM spokesman said production will remain idled until a deal is reached.

A Tegma spokesman said GM's decision was a surprise because it was still providing services for the auto maker. Tegma had to stop some activities at Gravatai because of a truckers' strike affecting areas of Rio Grande do Sul, the spokesman said.

Transzero had no immediate comment, though a spokeswoman said the company will respond later Wednesday.

The problems with some of its transport companies represents another bump in the road for GM in Brazil. The company, along with its rivals operating here, have seen steep drops in sales, production and exports due to the country's weak economy and the low level of consumer and business confidence.

Write to Rogerio Jelmayer at [e-mail]

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