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GM suspends 800 job cuts at Brazil plant, ending strike

The General Motors logo is seen outside its headquarters at the Renaissance Center in Detroit, Michigan in this file photograph taken August 25, 2009. REUTERS/Jeff Kowalsky/Files

SAO PAULO (Reuters) - Workers at a General Motors Co (GM.N) plant in Brazil ended a two-week strike on Monday after the company agreed to suspend nearly 800 job cuts, buying time in an industry where idle assembly lines have roiled labor tensions.

GM and the local metalworkers' union said they agreed that the workers facing termination would spend the next five months on paid leave and would get an extra rescission payment if their jobs are cut early next year. The company will also open a voluntary buyout program and the union said it was open to discussions about retirement plans.

"GM believes this is a positive decision, but it does not resolve the competitiveness issues with the Sao Jose dos Campos complex," the company said in a statement.

Last month GM said its Sao Jose plant would not be included in 6.5 billion reais ($1.9 billion) of new investments in Brazil through 2019 because the factory is not cost competitive. Labor relations at the plant have deteriorated amid layoffs and a dwindling production lineup.

The walkout, which halted operations at the Sao Jose dos Campos factory starting Aug. 10, was one of the longest strikes at the plant in the past two decades, underscoring the depth of the sector's current crisis.

Brazilian auto sales are down around 20 percent this year as rising inflation, unemployment and interest rates contribute to a slump expected to last through early 2016. Automakers have cut about 10,000 jobs in Brazil in the past year.

Separately on Monday, Daimler AG (DAIGn.DE) said it was cutting an additional 1,500 jobs at a Mercedes-Benz truck plant near Sao Paulo, leading workers to declare an open-ended strike at the factory.

(Reporting by Brad Haynes; Editing by Alan Crosby)