The

global vehicle assembly

industry and its periphery:
a comparative study on the work reconfiguration in Brazil

Fernando Ramalho Marti

Marcos Lázaro Prad
Mario Henrique Lados
ehicle assembly industry in Brazil
rom 1980 to 1997:

– productivity increasing and job losses (68,000) (Tomizaki, 2006)

Contradictions
– local vs global perspective
pansion of the automotive sector in Brazil
irst wave Delocalization process (from 1990s on
– From ABC Paulista to new regions
– 1956: 7 entrants in the national
market Company Place Year
Volkswagen Resende, RJ 1996
econd wave
Renault S. J. dos Pinhais, PR 1998
– 1990s: 13 new plants – neoliberal Volkswagen-Audi S. J. dos Pinhais, PR 1999
policy Toyota Indaiatuba, SP 1998
GM Gravataí, RS 2000
hird wave Ford Camaçari, BA 2002
– 2013: INOVAR-AUTO – Law 7.819 Fiat Goiana, PE 2015
Mercedes-Benz Iracemápolis, SP 2016
from Oct 3rd 2012
... ... ...
 Vehicle assembly industry in Brazil
Car production in 1990 Car production in 2016
São Paulo: 74,8% São Paulo 45,4%
2%
3% SP

0% MG
8%
RJ
7%
PR
45%
RS
13%

SC

7% BA

15% PE

GO

2016
(ANFAVEA, 2017)
 Jobs in Transportation Equipment Manufacturing Subsector
– selected cities from São Paulo State (1986 – 2016)

ities 1986 1990 1995 1999 2003 2011 20

ndaiatuba 1,037 1,075 3,056 2,460 3,785 7,004 5,1
acemápolis 0 0 0 63 193 118 5
iracicaba 660 606 735 1,568 1,724 2,513 6,2
orto Feliz 30 4 177 529 484 483 7

ão Bernardo do Campo 80,667 50,038 54,154 42,660 37,562 48,588 31,3

ão Caetano do Sul 15,577 12,546 10,941 5,922 5,463 12,175 8,0

ão Jose dos Campos 24,084 21,318 17,168 17,025 20,929 23,825 18,5

ão Paulo 70,235 79,448 41,928 28,240 28,173 27,554 18,3

orocaba 4,341 5,347 5,285 4,543 6,828 11,976 11,1

umaré 5,762 2,013 421 340 1,344 4,934 3,6
aubaté 9,921 9,379 9,189 8,141 7,644 11,435 8,7

stado de São Paulo 212,314 181,774 143,054 111,491 114,129 150,605 112,4
urce: RAIS/MTb
The research
•  Aim: comparing two plants located in: Goiana, PE and
Iracemápolis, SP

•  Research questions:
– Why Iracemápolis and Goiana?
– What are the characteristics of these municipalities?
– What are the characteristics of their workforce? Are there differences
and similitudes between them?
Data Source
•  Primary data
– Interviews (authorities, trade unionists, workers)

•  Secondary data
– Newspapers: Folha do São Paulo, O Estado de São Paulo, Jornal
do Commercio
– RAIS (Annual Social Information Report from Ministry of Labour
and Employment
– Websites: city council, Mercedes and Fiat
Municipalities
• Goiana • Iracemápolis
–  Population: 79,249 (IBGE - 2017) –  Population: 23,264 (IBGE - 2017)
–  Area: 445,810 km2 (IBGE – 2002) –  Area: 115,118 km2 (IBGE – 2002)
–  GDP per capita: R$ 49,198.06 (IBGE - 2015) –  GDP per capita: R$ 77,310.95 (IBGE - 2015)
–  HDI: 0.651 (2010) –  HDI: 0.776 (2010)
actories:
GOIANA IRACEMÁPOLIS
Fiat Chrysler Mercedes-Benz

•  Plant opening: 2015 (April) •  Plant opening: 2016 (March)

•  Main product: Jeep •  Main product: C-Class and GLA SUV
•  Production capacity: 20,000 (annually)
•  Production capacity: 250,000 (annually) •  Actual Output: 12,000 (annually)
•  Actual Output: 179,000 (annually) •  Direct jobs: 400
•  Direct jobs: 3,000 •  Production process:
•  Production process: o  Lean culture*
o  High level of manual work
•  World Class Manufacturing
•  Labour issues:
•  High level of automation o  Poor ergonomics and work
•  Labour issues: environment
•  Wage and profit sharing equalization o  Wage and profit sharing equalizatio
o  Disillusionment
•  Disillusionment
*Completely knock down – to be ver
Fiat Goaina’s Case: the public relation
campaign
•  Dealing with disillusionment
Why Iracemápolis and Goiana?
Inovar-auto: federal programme whose objective was to create conditions for
increased competitiveness in the automotive sector.
Lasted from 2013 to 2017.

•  Fiat Chrysler - Goiana •  Mercedes - Iracemápolis

–  Suape Port (Growth – Logistical advantages (good
Acceleration Program - PAC) access to highways, supply chain
–  Benefits (land, access to loans, and workforce)
tax benefits) – Benefits (land, access to loans,
–  Expansion of “global cars” ’ tax benefits)
local market – Expansion of “global cars” ’ local
–  Rural background market
– Rural background
Workforce

• Workers by plant
• Gender
• Age


* Source: RAIS / Ministério do Trabalho
 Workers by plant

8000

7000

6000

5000

4000

Fiat - Goiana
3000

2000 Mercedes - Iracemápolis

1000

0
2014 2015 2016
 Gender (2016)
Gender

Average wage by
gender
 Age (2016)
60,00%

50,00%

40,00%

Fiat - Goiana
30,00% Mercedes - Iracemápolis

20,00%

10,00%

0,00%
18 - 29 years old 30 - 39 years old 40 - 49 years old 50 - 64 years old
Preliminary considerations
•  Similarities
–  Attractive factors (inovar-auto, growth of local market, benefits, logistical advantages)
–  Both organizations have chosen greenfield regions, where workers had few experiences
in automotive industry
–  Both produce “global vehicles”
–  Trade unions engagement with workers seems to be weaker than in traditional regions

•  Differences
–  Mass production vs customized production
–  Fiat: younger workforce
–  Regarding gender: Mercedes presented a bigger gap between male and female wage.