The Mercedes-Benz truck unit of Germany's Daimler AG said on Tuesday it had dismissed 500 workers at a Brazilian truck plant and is putting about 7,000 others on paid leave as it suspends production in the face of plunging sales.
The assembly line in Sao Bernardo do Campo, near Sao Paulo, will go quiet for the first two weeks of June, the company said, adding that it could extend the break depending on demand.
Truck sales in Brazil tumbled about 40 percent in the first four months of this year compared with the same period of 2014, as business confidence crumbled and credit dried up in the face of a likely recession in Latin America's largest economy.
Automakers in Brazil shed 8 percent of their workforce in the 12 months through April, adding to rising unemployment and eroding the popularity of Brazilian President Dilma Rousseff, who worked for years to shield jobs in the auto industry.
Earlier this month Fiat Chrysler Automobiles granted 20 days of paid leave to 2,000 workers in the state of Minas Gerais, and Volkswagen AG stopped production at its Sao Bernardo do Campo plant for 10 days, putting 8,000 workers on leave, according to a local union.