End of LG phones puts 830 jobs at risk in Brazil – 4/5/2021 – Market

The closure of the LG cell phone factory in Brazil will put 830 direct jobs at risk in the Vale do Paraíba region, in the interior of São Paulo. In addition to the Taubaté unit, where 400 people work in the smartphone division, three other factories in the region will be affected by the decision by the South Korean technology company.

Blue Tech and 3C, in Caçapava, and Sun Tech, in São José dos Campos, together have about 430 jobs, most of them occupied by women. These three factories, according to the São José Metalworkers Union, have no other operations. The machinery and all production are geared only to serve LG.

“The companies have not yet been officially informed, but if they are no longer going to manufacture cell phones, they will close. The machinery is only for LG ”, says the union president, Weller Gonçalves.

The report was unable to contact third-party companies.

LG Electronics announced on Monday (5) the decision to close its mobile phone business worldwide, a decision approved by the board of directors. The company predicts, in a statement, that the shutdown of the smartphone production units will be completed by July 31.

“Details related to jobs will be determined at the regional level,” says the company in a statement.

On Tuesday (6), the Metalworkers Union of Taubaté will have the first of a round of meetings with LG to discuss the end of production. By the end of the week, there will be four meetings.

“Each division will have a specific closure plan. We are going to have meetings Tuesday, Wednesday, Thursday and Friday and we want to discuss social compensation for workers, ”says Cláudio Batista, president of the union.

LG do Brasil states, in a note, that it negotiates additional compensation for factory workers, in addition to the rights provided for by law. It also says that other possibilities, “such as relocation, transfer or termination” are not ruled out.

In Taubaté, LG produced up to 600 thousand cell phones per month, according to the union. Currently, it was on about 250 thousand devices monthly. In this plant, the devices are finalized, inspected and packaged.

In addition to smartphones, the Taubaté unit produces monitors, has a call center, technical assistance and the administrative sector. About 600 people work in these divisions.

The workers in the outsourced lines – about 90% are women, according to the union – are part of the assembly of the devices, in a stage prior to that which passes through the factory unit in Taubaté. The union of São José will have meetings with the companies contracted from this Tuesday.

“We want to guarantee these workers the same rights that will be paid to those of LG”, says Weller Gonçalves.

The announcement of the closure did not take workers by surprise. About ten days ago, the four factories in the Paraíba Valley were on strike, a type of warning to pressure some negotiation. The unions demanded from the heads some response on the possibility of the units being deactivated.

The South Korean press had been recording LG’s attempts to sell its smartphone factories to Vingroup, a Vietnamese technology conglomerate since the beginning of this year. The intention was to sell the factories in Brazil and Vietnam, but the negotiations did not proceed.

Sought, LG in Brazil still does not know how the technical assistance and after-sales services will be. In a note, it states that the cell phone business had been recording operating losses since the second quarter of 2015. The loss until December 2020 would have been US $ 4.1 billion (about R $ 23.1 billion). The South Korean also has, in Brazil, a unit in Manaus, where it produces televisions.

Procon-SP notified the company about the closing announcement. The consumer protection agency also wants the list of smartphones sold in Brazil, the estimated useful life of each device, the service plans and the offer of replacement components.

In the statement announcing the decision to end the smartphone operation, LG says it will continue to provide support and updates to consumers who own cell phones. This service will be maintained for a period that will vary according to the region.

“LG’s strategic decision to leave the incredibly competitive mobile phone sector will enable the company to focus resources on growing areas such as components for electric vehicles, connection devices, smart homes, robotics, artificial intelligence and business solutions, in addition to platforms and services, ”he says in a statement.

LG’s announcement is yet another setback for the Vale do Paraíba region. With Ford’s decision to leave Brazil, announced in January, Taubaté will soon lose 830 direct jobs and around 600 indirect jobs. The layoffs at the North American automaker are still under negotiation.

Last year, Embraer cut 2,500 jobs in São José dos Campos and Araraquara. The dismissals are being discussed in the Labor Court, through an action by the unions of the two cities, in which they ask for the reinstatement of those dismissed.

Amanda Lemos, from São Paulo, collaborated

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