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Brazil auto strike ends at Scania but others out

By Todd Benson

SAO PAULO, Brazil, Oct 30 (Reuters) - Metalworkers at a truck factory in Brazil owned by Sweden's Scania went back to work on Thursday after winning a pay raise, putting an end to a one-day strike, company and union officials said.

But thousands of other workers at factories belonging to German auto makers Volkswagen AG and DaimlerChrysler AG stayed home for the second straight day, paralyzing the VW plant and slowing production of Mercedes-Benz trucks at the Daimler unit.

The powerful ABC Metalworkers Union, once led by Brazilian President Luiz Inacio Lula da Silva, said workers at a Ford Motor Co. plant had also voted to extend their strike, but on a stop-and-go basis while wage talks continue.

Most of the employees at the Ford plant went back to work on Thursday, crossing their arms for just over two hours in protest, company and union officials said. The plant normally produces 500 cars a day.

The walkout in Sao Paulo's industrial belt is just the latest problem to hit Brazil's crisis-racked auto sector, which has seen sales plunge in the past two years amid a sharp economic slowdown in the South American country.

Close to 25,000 metalworkers downed tools on Wednesday after rejecting a raise of 15.7 percent to compensate for inflation over the past year. The union is demanding a pay increase of 20 percent.

But workers at Scania backed off their initial demand on Wednesday, accepting an 18.1 percent raise for employees who earn up to 5,000 reais ($1,755) a month. Those workers higher up on the pay scale will earn an extra 785 reais a month.

A Scania spokesman said employees had agreed to work overtime in early November to make up for lost production, estimated at 60 trucks.

Sinfavea, the association representing the manufacturers, declined to comment on the progress of the wage talks. It did, however, issue a statement saying it had taken legal action to dissolve the strike.

Volkswagen, which has been hit especially hard by the economic slowdown in Brazil, has suffered the brunt of the strike. Some 14,800 workers at VW's Sao Bernardo do Campo plant stayed home from work, bringing production to a halt for the second day in a row, a company spokeswoman said.

On Wednesday, VW singled out Brazil as a main reason its third-quarter operating profit fell 57 percent, after taking a 120 million euro ($140 million) charge for a program to lay off nearly 4,000 workers in the South American nation.

A spokeswoman at Daimler had no immediate comment, but the metalworkers union said some 1,500 workers on the Mercedes production line stayed home for the second straight day.

Workers at a nearby General Motors Corp. factory are also threatening to join the strike should the U.S. auto giant doesn't meet their wage demands by the end of the week. ($1=2.85 reais / $1=.8542 euro) (Additional reporting by Alberto Alerigi)