SAO PAULO – Volkswagen do Brasil Ltda. has backed down from its threat to fire workers who walked off the job after a warning from Sao Paulo Governor Geraldo Alckmin that workers in Brazil have a right to strike.

Approval to fire the workers came from Berndt Pischetsrieder, CEO of German parent company Volkswagen AG.

The strike was called to protest the transfer of 3,933 workers to a new company where they would be retrained for functions at other Volkswagen plants or seek employment elsewhere. According to a company proposal, the workers would receive their salary until they were relocated. (See related story: VW Brazil Workers Reject Voluntary Layoffs)

Volkswagen Brazil now is assuring the metal workers union in Taubate that strikers will not be fired.

“I don’t know in what context the statements were made, but we are not going to fire anyone who is on strike," says Ricardo Carvalho, VW director-government affairs, in a meeting with the labor ministry in Sao Paulo.

The meeting was called by Labor Minister Judge Oksana Maria Dziura, who called on Volkswagen to “abstain from making anti-labor statements.”

VW Brazil has resumed discussion with the labor union regarding the transfer of 1,923 employees in Sao Bernardo and 2,010 employees in Taubate for a training meeting with Autovisao, a new company set up to relocate VW workers.

The auto maker wanted the workers to be transferred Oct. 1, but the deadline now is on hold. “We want the company to present a proposal that is better than the one that was rejected, " says Jose Lopez Feijoo, president of the metal workers union in the Sao Bernardo region.

VW Brazil says it might give transferred workers collective holidays for one month beginning Oct. 13 if no agreement is signed. The 14,800 Sao Bernardo workers have guaranteed jobs to 2006, while the Taubate workers’ contract ends in February 2004.

Carvalho says the worker transfer does not represent a violation of the work contract because they will receive their salaries for the life of the labor agreement.