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Strike ends at Brazil GM plant after union flexes muscle

(New throughout, updates with union election, adds background)

By Brad Haynes

SAO JOSE DOS CAMPOS, Brazil, Feb 26 (Reuters) - Workers at a General Motors Co car factory in Brazil ended a six-day strike on Thursday after the company dropped plans to lay off 800 employees, the union said, ending the latest labor standoff in the troubled Brazilian auto industry.

Later on Thursday the metalworkers union of Sao Jose dos Campos re-elected its leadership by a three-to-one margin, highlighting the appeal of more confrontational union tactics that are gaining steam across the country.

The re-elected leadership, which also organized a strike against planemaker Embraer SA last year, credited its hardline reputation and consistent criticism of President Dilma Rousseff for the decisive win over their opponents, who were backed by a national union with close ties to the ruling party.

Rousseff's popularity has slumped to an all-time low as the Brazilian economy founders and she pushes to close a federal budget gap with tax increases and stingier pension policies.

"The country is fed up with the president. When she went after the pensions, that was checkmate for us," said Wagner Morais de Oliveira, an Embraer employee backing union leaders.

The strike at GM followed labor disruptions for the Brazilian operations of Volkswagen and Mercedes Benz as workers revolted at payroll cuts after losing 7 percent of colleagues in the industry last year.

In a compromise with the union, GM agreed to furlough 650 workers for five months, with a guarantee they will get their jobs back, said the metalworkers' union of Sao Jose dos Campos, which sits about 55 miles (90 km) outside Sao Paulo.

GM representatives did not respond to a request for comment.

Workers brought production to a standstill last week to protest GM's proposal to furlough nearly 800 workers for two months before laying them off in April.

Stoppage days will not be deducted from wages and the company vowed not to retaliate against workers who walked off the job in the longest strike GM has faced in Brazil in the last 12 years, the union said.

GM has cut its payrolls at the factory from about 7,500 workers in 2012 to about 5,200 currently.

(Additional reporting by Anthony Boadle; Editing by David Gregorio)