Volkswagen will halt production at all plants for 12 days from March 24 on account of rising COVID-19 cases. The company’s Brazilian unit announced the news on March 19. Volkswagen is Brazil’s largest producer of automobiles.
The aim of this temporary shutdown is to preserve the health of the employees amid the surge in cases in the worsening pandemic situation. The decision was taken after negotiations with ABC Metalworkers Union which is determined to halt production lines in the region to curb COVID cases.
Brazil is a major auto producer and a key base for Volkswagen. The company had to cut production in 2020 too at the beginning of the pandemic.
COVID-19 situation
Brazil reported the second highest COVID-19 related deaths after the US. Cases in Brazil are increasing rapidly. On Friday, the country reported 90,570 new cases, the highest single day rise.
Local media reports suggested that Brazil is going through a critical situation and called it catastrophic. As of March 16, intensive care beds in the country were nearly full.
The current scenario would result in disruptions across supply chains and upstream and downstream demand. Rising cases would hamper production across not only auto manufacturers but also mining, smelting, scrap collection and others which will have a negative impact in the coming terms.