Workers at Ford, DaimlerChrysler, and Scania had returned to work earlier, having already won an identical increase. Their counterparts at General Motors, who are organized in a different union and did not walk out, have won a similar raise.

Reuters described the court’s decision as “a defeat for Volkswagen, which had been reluctant to sweeten its initial salary adjustment offer of 15.7 percent”—the same as the rate of inflation.

In a November 4 statement on the agreement with workers at DaimlerChrysler, Ford, and Toyota, the International Metalworkers Federation said that the wage raise “represents the rate of inflation during the past period, plus a 2 percent real increase.” The agreement also mandates a cost of living increase in September 2004, and maintains benefits at their present levels until August 2005.

The day before the court ruling, the 15,000 workers at the Volkswagen plant in São Paolo’s industrial belt had demonstrated their determination to maintain their strike by voting down an agreement between their union representatives and the bosses.

Along with 10,000 other members of the ABC union, they had shut down production October 29 in response to the bosses’ refusal to budge from their initial wage offer. The walkout stopped production at targeted factories and forced Volkswagen to close others because of a lack of parts. The Volkswagen bosses initially pleaded poverty, arguing that their Brazilian operations were responsible for a 57 percent drop in their international third-quarter profits. They have also announced plans to slash 4,000 jobs from their plants in the country.

Once held up as a model for “emerging” capitalist countries in Latin America, Brazil’s economy began a tailspin in 1998 marked by a contraction of the gross domestic product and the skyrocketing of interest rates up to 150 percent.

Working people in Brazil have suffered the brunt of this crisis. The currency lost 35 percent of its value in 2002, and real wages for workers in Brazil declined by 8 percent between March 2002 and March of this year. Inflation in the year ending in September reached 15 percent.

At the same time, unemployment has soared to 20 percent in São Paolo, the country’s largest city—making for nearly 2 million jobless in that industrial center alone. Nationwide the figure stands at 13 percent.

Meanwhile, the Brazilian government of Luiz Inácio Lula da Silva came to an agreement November 6 with the International Monetary Fund (IMF) to renew its expiring loan program for another year. The accord provides $6 billion in new funding and delays Brazilian payments of $5.5 billion until 2006. Brazil’s total foreign debt stands at $260 billion. An IMF representative commented that the Brazilian government’s economic policy represents a “sound program.”  
 
 
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