GM, Mercedes-Benz to enforce ‘collective holidays’ in Brazil due to coronavirus outbreak

Automobile manufacturers General Motors (GM) and Mercedes-Benz have enforced “collective holidays” at their Brazilian operations starting from March 30, in response to the novel coronavirus outbreak (2019-nCoV), the companies said on Wednesday March 18.

Mercedes-Benz owner Daimler will introduce the collective holidays from March 30 to April 19 and will allocate additional days off for certain workers from March 25-27 and on April 20.

The automaker will maintain essential services to support to customers, it said.

The measures were taken to reduce the spread of 2019-nCoV, the company said.

Additionally, Daimler said it had started a flu vaccination campaign for all workers in Brazil on Wednesday.

GM told Fastmarkets that it was enforcing collective holidays on March 30, “to adjust production to market demands” but did not provide an end date for the measure.

Neither company specified the number of workers affected nor what impact the measures might have on production levels.

According to data from the steelmakers’ association, Instituto Aço Brasil, vehicle and auto parts output has accounted for around 18% of total domestic steel sales volumes in the country in the past few years.

Steelmakers passed on an average 5% price increase for the auto industry in 2020 annual contracts, according to Aço Brasil.

The commercial director for steelmaker Companhia Siderúrgica Nacional (CSN), Luis Martinez, said on March 5 that he would be looking to renegotiate those contracts because prices in other sectors have increased since January.

Brazilian steelmakers recently announced further price increases for local distributors, amid currency volatility in the country.

Fastmarkets monthly price assessment for steel hot-dipped galvanized coil, domestic, monthly, exw Brazil, rose to 3,403-3,423 Reais per tonne on March 13, from 3,110-3,140 Reais per tonne in the previous month.

Auto production in the country reached 2.94 million units last year, up by 2.3% from 2.88 million units in 2018, manufacturer association Anfavea said on January 7.

Earlier in March, Anfavea said there was a good chance that automakers in Brazil would halt operations because of a shortage in auto part imports, particularly those from China.

In 2019, GM sold 475,000 vehicles in Brazil - under its Chevrolet brand - accounting for 6% of total sales worldwide.

Daimler, owner of the Mercedes-Benz brand, sold 29,700 trucks and 11,400 bus chassis in Brazil last year.

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