GM cuts 744 jobs in Brazil, union threatens strike

SAO PAULO (Reuters) - General Motors Corp said on Monday it cut 744 jobs at one of its plants in Brazil to adjust for slumping demand, prompting the local metalworkers union to threaten to strike.

GM is one of several automakers in Brazil that are either placing factory workers on paid leave or cutting jobs in the face of an economic slowdown and credit crunch that have hit the auto industry especially hard.

The job cuts will take place at GM's plant in Sao Jose dos Campos, where it employs about 8,900 workers and produces the Corsa subcompact model, the Meriva and Zafira minivans and the Montana pickup truck.

"As a result of shrinking industrial activity in general, particularly in the automotive industry, forecasts for vehicle sales in the domestic market for the first quarter of 2009 are being revised," the U.S. automaker said in a statement confirming the layoffs.

The local metalworkers union said it would hold an assembly on Tuesday to vote on whether to strike in protest.

"Striking against layoffs is a necessity. It's a tool that we intend to use," Luiz Carlos Prates, the union's secretary-general, told a news conference that was transmitted via Web cast.

Another union leader, Vivaldo Moreira Araujo, was less categorical. He said the union would consider other forms of protest.

"The proposal is to mobilize," said Araujo, a GM employee. "It could be a strike but it could also be a protest march."

GM's vehicle sales fell 1.3 percent in December from November to 29,310 units, contrasting with the 9.4 percent rise in sales for Brazil's automobile industry as a whole.

The country's automakers association said last week that vehicle output plunged 47.1 percent in December from November as companies idled factories to cope with a drop in demand.

(Reporting by Alberto Alerigi Jr and Vanessa Stelzer; Writing by Todd Benson; Editing by Tim Dobbyn)