SAO PAULO - Auto companies and the Brazilian government agreed to a public relations truce until April.
A government tax increase last autumn killed the Brazilian car market, causing instant layoffs and plant closures.
In the truce, the auto companies agreed not to lay off more workers or blame the government for a few months, and the government agreed to try to lower interest rates to previous levels.
The war of angry words included these from Walter Barelli, labor secretary for the state of Sao Paulo:
'Oligopolies always try to bring the government down to its knees. They use their power to transform economic crises into social ones, so as to reap the benefits.'
BMW ignored the crisis as it announced a new Land Rover kit plant to build up to 5,000 units of the Defender annually. 'Brazil is the economic engine of South America,' said Michael Turwitt, president of BMW do Brasil. 'We see no crisis here, just a difficult phase. The trend of the auto market is positive.'
Auto production and sales may fall 15 percent this year, depending on the economy and government measures. Production plans for the first two months anticipate a 25 percent fall from last year.