Striking Brazil Autoworkers Sign Two-year Contract

SAO PAULO, Brazil, Oct 21 Reuters reported that striking car assembly workers in Brazil's industrial hub of Sao Paulo accepted on Sunday a two-year wage contract from some of the world's top carmakers that should put an end to staggered work stoppages.

They went on to report that Luiz Marinho, president of the Sao Paulo Metal Workers Union, said manufacturers agreed to pay some 42,000 assembly workers a retroactive salary increase of about 7.75 percent to compensate for inflation over the past year.

The story continued, assembly workers may also receive an additional 2 percent inflation-adjusted increase if annual auto production reaches 1.065 million vehicles, 40,000 units more than in 2000. The union also renewed fringe benefits for a two-year period.

The accord comes as Brazil's auto sales slump on the back of an economic slowdown at home and in export markets and as high interest rates and a weak currency sap Brazilian consumers' confidence and slash their purchasing power.

``Given the current circumstances, the signing of an agreement valid for two years is extremely positive for the workers and for the Brazilian economy,'' Marinho told Reuters.

Sao Paulo state concentrates about 70 percent of auto production in Brazil, South America's biggest car maker.