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UPDATE 2-VW CEO says would fire striking workers in Brazil

(Adds Brazilian union comment, updates share price)

By Jan Schwartz

WOLFSBURG, Germany, Sept 23 (Reuters) - The chief executive of Volkswagen , Europe's biggest car maker, said late on Monday he would dismiss any workers in Brazil who went on strike after employees rejected a plan to cut nearly 4,000 jobs.

"Anyone who goes on strike will be dismissed," Bernd Pischetsrieder told reporters at an event in VW's hometown of Wolfsburg in northern Germany.

Workers at VW's Brazilian unit last week spurned plans to reduce its work force by nearly 4,000 through voluntary layoffs or retraining. Employees at two plants agreed to enter a state of alert that could lead to a strike.

Jose Lopez Feijoo, the president of the metalworkers union in the ABC region near Sao Paulo, where VW has its biggest Brazilian plant, said the workers would not be threatened.

"It should be made clear to the car company that the workers will respond to attacks on agreements with every form of struggle at their disposal and it will not be threats from Germany that will make the workers back down," he was quoted as saying in a statement on Tuesday.

VW is aiming to break even next year in Brazil, where it has said the car market is the worst the sector has seen for a decade. VW's business is set up to assemble 740,000 vehicles a year but is currently producing about 470,000 due to weak demand in Latin America.

The group as a whole has said its operating profit will fall significantly below last year's 4.76 billion euros ($5.47 billion), hit in part by costs from Brazil. But it has said it will swallow all the charges for the business in this year's accounts.

Incoming finance chief Hans-Dieter Poetsch recently said he would not contradict an assertion that the one-off charge for Brazil would run into hundreds of million euros in the third quarter alone, but declined to give a precise figure.

VW stock was down 2.6 percent at 40.60 euros in late trading, underperforming sector peers and Germany's benchmark index .

HOLE IN ONE

Board member Detlef Wittig said demand for VW's new Golf, the fifth generation of the world's second most popular car, was strong ahead of its official market launch next month.

"You can rest assured that everything that we aim to build this year is already sold," Wittig said at the event. VW has said it plans to build 135,000 Golf Vs this year, and around 600,000 next.

The company had been considering taking legal steps to prevent a German retailer from offering a 10 percent discount on Internet orders for the Golf, a model that traditionally accounts for more than a third of unit sales and around half of profits at the VW brand.

But Wittig said the company had concluded that it had no grounds for legal action after the mail-order division of retailer KarstadtQuelle offered the discount with its partner Carplus.

Quelle spokesman Erich Jeske said so far it had sold at least 100 cars with the discount.

VW is banking on the Golf V to give earnings a significant lift in 2004 after a year of falling profits, and the prospect of widespread and heavy discounting could put pressure on its aim of higher margins on the latest generation of the car.

(Additional reporting by Nicholas Winning in Sao Paulo)

($1=.8698 euro)