SAO PAULO (Reuters) -- Workers at a Volkswagen Group factory in Brazil voted on Friday to end a 10-day strike after the carmaker agreed to reverse the layoff of 800 employees and presented a new labor deal through 2019.
Volkswagen said it would cut costs instead through voluntary buyouts and the end of some third-party contracts. With the labor deal in place, the carmaker plans to begin producing vehicles soon based on a new global platform at the plant on the outskirts of Sao Paulo.
Union representatives said a new accord with the company provided for annual salary increases of 1 percent plus inflation instead of one-time bonuses the company offered last year. VW declined to comment on the details of the wage deal.
Production will resume on Monday, the local metalworkers union said, ending a stoppage that began January 6 to protest the layoffs.
The cutbacks, along with around 250 at a nearby Mercedes-Benz plant, led to union protests that closed down part of a highway outside Sao Paulo this week and turned up pressure on President Dilma Rousseff.
Her restraint in the latest labor standoff contrasted sharply with ones in recent years, when protests by unions closely aligned with her Workers' Party led her to explicitly warn against layoffs in exchange for ongoing tax breaks to help the struggling industry.
Rousseff's new economic team took office this month pledging an end to such favoritism and targeted stimulus in a push to restore fiscal discipline and improve the competitiveness of Brazil's stagnant economy.
As industrial tax breaks gradually expired last year, automakers trimmed payrolls by nearly 9 percent, trying to restore profits in a sharp downturn with little hope of an immediate rebound.
VW said Monday that group sales in Brazil fell 17 percent to 629,800 last year.