{"id":60065674,"date":"2025-01-09T12:37:27","date_gmt":"2025-01-09T12:37:27","guid":{"rendered":"https:\/\/dialogue.earth\/?p=60065674"},"modified":"2025-01-21T13:49:33","modified_gmt":"2025-01-21T13:49:33","slug":"brazils-unions-see-potential-and-pressures-from-chinese-carmakers","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/business\/brazils-unions-see-potential-and-pressures-from-chinese-carmakers\/","title":{"rendered":"Brazil\u2019s unions see potential and pressures from Chinese carmakers"},"content":{"rendered":"\n

The rapid expansion<\/a> of the market for electric vehicles in Brazil, particularly Chinese cars, is transforming the country\u2019s automotive industry and could have an impact on workers and production chains, say Brazilian trade unionists in the sector.<\/p>\n\n\n\n

The share of electric and hybrid vehicles among new registrations in the country has already grown from 4%<\/a> between January and October 2023 to 7%<\/a> in the same period in 2024, according to the National Association of Motor Vehicle Manufacturers (Anfavea).\u00a0<\/p>\n\n\n\n

These EVs are imported into Brazil, but several automakers have invested<\/a> in production within the country. In addition to established brands such as Volkswagen and Toyota, China\u2019s Build Your Dreams (BYD) and Great Wall Motors (GWM) are preparing to open factories in Brazil.<\/p>\n\n\n\n

In 2021, GWM acquired<\/a> a plant owned by Mercedes-Benz in Iracem\u00e1polis, in the state of S\u00e3o Paulo, where it plans to start<\/a> manufacturing hybrid vehicles in 2025. In 2023, BYD bought<\/a> a factory that Ford had operated for two decades in Cama\u00e7ari, in the north-eastern state of Bahia, and also plans to begin production this year, though controversies around the conditions for workers at its site led to construction being paused<\/a> by Brazilian authorities in late December.<\/p>\n\n\n\n

As well as relying on imported components, the manufacture of electrified vehicles uses far fewer parts<\/a> than combustion engine models and requires specific skills. Chinese companies are promising thousands of new jobs in Brazil, but unions in the traditional automotive industry are expressing concerns.<\/p>\n\n\n\n

To ensure a fair energy transition \u2013 with fewer combustion-engine cars, but without excluding those working in the industry \u2013 they say Brazil must take ownership of the production chain and invest in retraining its workers.<\/p>\n\n\n\n

107,000<\/p>

people are currently employed in the Brazilian automotive sector, according to Anfavea, Brazil\u2019s motor manufacturers\u2019 association<\/p><\/div><\/div>\n\n\n\n

\u201cWe demand that production processes guarantee jobs and the development of [EV] technologies in Brazil. If not, we\u2019re going to destroy our factories,\u201d said Aroaldo Silva, president of IndustriALL-Brazil, an umbrella organisation bringing together two national trade union federations, CUT and For\u00e7a Sindical, and representing ten million workers in manufacturing.<\/p>\n\n\n\n

In contrast, trade unionists in the cities that will receive the new facilities are optimistic. \u201cThere have been the best expectations,\u201d said J\u00falio Bonfim, president of the Cama\u00e7ari Metalworkers\u2019 Union.<\/p>\n\n\n\n

According to Bonfim, BYD\u2019s initial estimate was to produce 50,000 cars a year, generating 3,000 jobs. Later, the projections were increased to 5,000 jobs, then to 10,000, accompanied by an annual production of 300,000 vehicles<\/a>. \u201cThis is what we produced at Ford\u2019s peak [at Cama\u00e7ari] between 2008 and 2009,\u201d said Bonfim.<\/p>\n\n\n\n

In its own communications<\/a>, BYD affirms these projections and says it wants to turn Cama\u00e7ari into a hub to attract suppliers from the entire electric vehicle production chain, including parts and accessories. It even promises to establish<\/a> in the city the company\u2019s first lithium battery production unit for EVs outside of Asia, with production initially scheduled to begin in 2025.<\/p>\n\n\n\n

GWM, meanwhile, plans to<\/a> create 700 jobs and produce 50,000 vehicles annually within three years. The operation in Iracem\u00e1polis will produce components such as tyres, windows, wheels, seats and wiring harnesses. The company says that its goal is to achieve 60% of these items being produced in Brazil in that same period, and then begin exports to other Latin American countries.<\/p>\n\n\n\n

Rapid entry of imported EVs<\/strong><\/h2>\n\n\n\n

The automotive sector is a notable contributor to Brazil\u2019s economy and employment. The production of cars, vans, buses and lorries employs more than 107,000 people across the country, according to October figures from Anfavea<\/a>. This is the highest figure in five years, but still below the national peak of 135,000<\/a> in 2013. More than ten factories, including operations run by Honda and Toyota, have closed since 2015.<\/p>\n\n\n\n

Brazil\u2019s economic crisis of 2014-16, and the shocks and stagnation that have shaken the country in the decade since, are seen<\/a> as the main cause of the downturn, but unions also blame tax incentives for imported electric vehicles. In 2015, the Dilma Rousseff government (2011-2016) zeroed<\/a> the import tax on electric cars and reduced the rate for hybrids. The exemptions created unequal competition with the Brazilian market, these groups claim.<\/p>\n\n\n\n

\u201cBYD came with a very aggressive proposal for low-cost electrics and hybrids,\u201d said Wellington Damasceno, executive director of the ABC metalworkers\u2019 union, which represents workers in the S\u00e3o Paulo metropolitan region. In 2022, BYD began selling its electric vehicles in the Brazilian market with the launch of the Dolphin model.<\/p>\n\n\n\n

\"An<\/div>
An electric car at a charging point in Brasilia. Electric and hybrid vehicles sales, led by Chinese manufacturers, grew rapidly in Brazil between 2022 and 2023, which has seen the government announce a resumption of import taxes in attempts to protect domestic manufacturing (Image: Jos\u00e9 Cruz \/ Ag\u00eancia Brasil)<\/div><\/div><\/div><\/div>\n\n\n\n

According to Anfavea<\/a>, sales of Chinese cars in Brazil rose from 7,052 in 2022 to 41,288 in 2023, driven by electric and hybrid vehicles. And in May 2024, Brazil became the main overseas market for Chinese EVs, as Reuters reported<\/a>.<\/p>\n\n\n\n

\u201cAlthough the volume is not that significant, in percentage terms, it is growing stratospherically,\u201d said Warley Soares, an economist at the Inter-Union Department of Statistics and Socioeconomic Studies (Dieese).<\/p>\n\n\n\n

Chinese makers\u2019 share of vehicle sales in Brazil jumped<\/a> from 7% in the first half of 2023 to 26% in the same period in 2024. Among the five largest<\/a> electric vehicle manufacturers that led sales in Brazil in the first quarter of 2024, three are Chinese, and one \u2013 Sweden\u2019s Volvo \u2013 is now majority Chinese-owned.<\/p>\n\n\n\n

\u201cIf production isn\u2019t consolidated in Brazil, this volume, which today doesn\u2019t affect jobs, will start to do so,\u201d suggested Soares.<\/p>\n\n\n\n

Following calls to protect the domestic automotive industry in the wake of this strong entry of Chinese vehicles into the Brazilian market, the national government announced<\/a> at the end of 2023 a gradual resumption of import taxes for electric and hybrid vehicles, with rates set to return to 35% by July 2026.<\/p>\n\n\n\n

Amid international tensions and increasing moves towards protectionism, raising tariffs on imported electric vehicles has been a prominent issue in international politics in recent months. In October, the European Union raised<\/a> the import tariff on Chinese EVs from 10% to 45%, while Canada increased<\/a> its own tax on these vehicles to 100%.<\/p>\n\n\n\n

This is the same rate applied<\/a> by the United States since May. The US President-elect Donald Trump has pledged<\/a> to further tighten tariffs on Chinese products. Meanwhile, analysts believe<\/a> that Beijing is preparing to retaliate against Trump\u2019s policies, in an intensifying trade war which could have significant impacts on global production chains.<\/p>\n\n\n\n

Between hopes and fears<\/h2>\n\n\n\n

For Brazil\u2019s trade unions, doubts remain over the extent to which foreign carmakers will ultimately manufacture their EVs in the country.<\/p>\n\n\n\n

\u201cWe\u2019re a bit sceptical as to whether there will actually be domestic production, with the entire production process taking place on Brazilian soil,\u201d said Silva, from IndustriALL-Brazil. He fears that companies will use what is known as complete knock-down (CKD), in which parts manufactured and supplied from abroad are assembled in another country. \u201cIt\u2019s like a Lego. CKD creates unfair competition,\u201d he suggested.<\/p>\n\n\n\n

<\/div>
Recommended<\/span><\/span><\/div><\/a>\n\n\n\n

There are also concerns about the reduction in the parts needed for electric vehicles and the impact this may have on workers in their production. \u201cAn electric car has around 60% fewer components. They don\u2019t have a timing belt, clutch, alternator, fuel pump,\u201d said Soares, from Dieese, pointing out that a large production chain currently produces these parts for combustion vehicles in different parts of the country. \u201cThey will no longer be produced, and that will generate unemployment,\u201d he argued.<\/p>\n\n\n\n

In order to preserve jobs, Silva emphasised that it is essential to develop new production chains in Brazil: \u201cWe don\u2019t produce anything in the battery chain, for example. What\u2019s more, we\u2019ve already got rid of the electronics chain in vehicles. EVs have more robust on-board electronics, and we need to reorganise this chain here.\u201d<\/p>\n\n\n\n

However, there remains no consensus on the impacts of fewer parts on the workforce in the electric vehicle industry. A study from the University of Michigan, published in September, indicated<\/a> that assembling EVs may ultimately require up to ten times more workers compared to traditional vehicles. Another one, published<\/a> in the journal Energy Policy in March, suggests that in addition to requiring more professionals, the manufacturing of EVs could absorb workers from the combustion engine industry.<\/p>\n\n\n\n

\"A<\/div>
Electric vehicles from different manufacturers exhibited at an Anfavea event in Brasilia in 2023. Electric models require fewer components than combustion engines, which some observers see as a threat to the number of jobs in production, though others suggest the transition to EVs may create opportunities for employment and retraining (Image: Marcelo Camargo \/ Ag\u00eancia Brasil)<\/div><\/div><\/div><\/div>\n\n\n\n

Bonfim, from the Cama\u00e7ari union, believes there will be progress in expanding Brazil\u2019s industry\u2019s presence in the EV production chain, and that BYD\u2019s investment could be notable in this. \u201cFord\u2019s plant is monstrous, it\u2019s being completely redesigned, and the company [BYD] has even bought a 1.5 million square metre plot next door,\u201d he commented. \u201cNobody makes an investment of this size to produce only CKD or SKD [semi-knock down].\u201d<\/p>\n\n\n\n

He adds that, so far, the union\u2019s negotiations with BYD have been positive. But the company itself has encountered challenges. A report by Ag\u00eancia P\u00fablica,<\/a> an investigative media outlet, revealed that Chinese workers from outsourced companies have been working up to 12 hours a day at the Cama\u00e7ari construction site, without weekly breaks or protective equipment. There are also reports of physical abuse, lack of drinking water and degrading accommodation.<\/p>\n\n\n\n

Following the complaints, BYD said it had cancelled the contracts<\/a> and demanded action from those responsible. On 23 December, the national Labour Prosecutor\u2019s Office said it had halted construction<\/a> at the site and rescued 163 workers following its own investigation, with BYD and contractor firm Jinjiang Group reportedly now assisting in re-housing those affected in hotels until the end of their contracts. Jinjiang Group has contested<\/a> the description of \u201cslavery-like conditions\u201d for the workers.<\/p>\n\n\n\n

Speaking to Dialogue Earth in November, Bonfim declined to comment on the issue, saying that this was the responsibility of the construction union and not the metalworkers\u2019 union. Regarding the presence of Chinese employees in the construction of the plant, Bonfim said that this usually happens in the early stages of the process. \u201cWhen Ford started [operating in Cama\u00e7ari] in 2001, it was full of Americans,\u201d he said. \u201cNobody knows how to start up a hybrid and electric car factory, so Chinese people will have to do it.\u201d<\/p>\n\n\n\n

<\/a>Urgent public policies<\/h2>\n\n\n\n

Damasceno, from the ABC metalworkers\u2019 union, argued that the main strategy for a just transition in Brazil\u2019s automotive sector is to diversify the vehicle technologies used in the country. He points out that Brazil already has a thriving biofuels sector, including combustion ethanol, biodiesel, biogas and biomass, as well as the possibility of incorporating green hydrogen \u2013 an area in which Brazil has already launched cooperation<\/a> with China.<\/p>\n\n\n\n

\u201cThe country has several options and can take advantage of their potential,\u201d said Damasceno. \u201cWe would have a more gradual transition and a greater chance of converting current capacities to a new industry.\u201d<\/p>\n\n\n\n

We need to make Brazil a major export player for Latin America. We\u2019re losing ground to China<\/blockquote>Warley Soares, economist at the Inter-Union Department of Statistics and Socioeconomic Studies (Dieese)<\/cite><\/div><\/div>\n\n\n\n

Although the transition from combustion to electric vehicles could result in a model with fewer jobs and greater specialisation, low-carbon sectors can generate new jobs, said Amanda Ohara, a researcher at the Institute for Climate and Society.<\/p>\n\n\n\n

\u201cThe transition leads to the generation of new sectors that we can\u2019t see clearly today,\u201d said Ohara. \u201cThere\u2019s the solar and wind industry, biofuels themselves, green hydrogen, green steel. If the investment is done well, these sectors can house part of the workers.\u201d<\/p>\n\n\n\n

All those interviewed by Dialogue Earthemphasise the urgent need for bolder public policies than the current ones to protect and create new jobs in Brazil in the face of changes in the sector. According to Damasceno, the government\u2019s Mover programme<\/a>, which encourages the decarbonisation of the Brazilian vehicle fleet, should incorporate best practices, such as retraining, and encourage companies to promote the strengthening of their domestic production chains.<\/p>\n\n\n\n

Warley Soares, for his part, considers the BRL 28 billion (USD 4.6 billion) a year earmarked for the programme to be insufficient. \u201cThis is far too little for the demand required. We need policies that have the ambition to make Brazil a major export playerfor Latin America,\u201d he said. \u201cWe\u2019re losing ground to China [as a regional exporter], but from a logistical point of view it\u2019s much more complicated to bring a bus from there than to produce it here.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Organisations have a mixed outlook on what the transition to electric vehicles, and an influx of Chinese imports and investments in factories, mean for workers<\/p>\n","protected":false},"author":50000145,"featured_media":60065740,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[758],"tags":[13444,50041624,50042156,600],"hashtags":[],"country":[50000021,20000110],"class_list":["post-60065674","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-electric-vehicles","tag-labour","tag-overseas-investment","tag-trade","country-brazil","country-china"],"acf":[],"yoast_head":"\nBrazil\u2019s unions see potential and pressures from Chinese carmakers | Dialogue Earth<\/title>\n<meta name=\"description\" content=\"Organisations have a mixed outlook on what the transition to electric vehicles, and an influx of Chinese imports and 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