On November 6, 2023, General Motors (GM) made a surprising announcement, reversing its decision to lay off 1,245 workers at its factories in São José dos Campos, São Caetano do Sul, and Mogi das Cruzes in São Paulo, Brazil. This unexpected turn of events came after a Brazilian labor court rejected GM’s request for a legal injunction to proceed with the job cuts. The cancellation of the layoffs was primarily attributed to a 13-day strike led by the labor union, Sindmetal.
Sindmetal, the union representing the workers, hailed this decision as a “historic victory” and a testament to the power of collective action. The strike, organized by metalworkers at GM’s Brazilian plants, was a direct response to the company’s announcement of downsizing its workforce due to declining sales and exports. The union had demanded the complete reversal of the job cuts and job security for all employees.
Interestingly, GM’s decision to cancel the layoffs in Brazil coincided with the resolution of a separate labor dispute in the United States. The company had recently reached a tentative agreement with the United Auto Workers (UAW), effectively ending a six-week strike by American workers. The deal with UAW included a significant 25% hourly pay increase and cost-of-living allowances over a four-and-a-half-year contract.
GM’s financial performance also played a role in this turn of events. The company reported a robust third-quarter FY23 revenue of $44.13 billion, surpassing the expectations of analysts who had estimated $43.68 billion. Additionally, GM’s adjusted earnings per share (EPS) stood at $2.28, outperforming the analyst consensus estimate of $1.88. As a result, GM shares experienced a notable surge, closing 3.37% higher at $29.77 on Friday.
In light of these developments, GM representatives are now scheduled to meet with union leaders to officially confirm the cancellation of the layoffs in Brazil. This unexpected twist in the narrative demonstrates the power of collective action and serves as a reminder that workers can influence corporate decisions when they stand united.
Source: Beststock
