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Volkswagen to cut working hours, wages in Brazil as parts shortage deepens

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FILE PHOTO: Volkswagen's factory is seen in Sao Bernardo do Campo
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SAO PAULO (Reuters) - Volkswagen AG is set to cut working hours and wages at its Sao Bernardo do Campo factory in Brazil as it grapples with a lack of auto parts and electronic components to assemble its vehicles.

The metalworkers union of Sao Bernardo do Campo said on Wednesday it had agreed to a plan for the German carmaker to cut working hours by 24% and paychecks by 12% starting next month.

According to the union, the arrangement will take effect beginning July 7, when workers are set to get back from a 10-day shutdown.

In a statement to Reuters, Volkswagen's Brazilian unit confirmed it would adopt "new measures to make the workforce more flexible at the Sao Bernardo do Campo unit during the month of July due to lack of components."

The union said the measure would be reassessed on a monthly basis and that its end would depend on the normalization of the supply of auto parts. Wellington Damasceno, a union official, said the move was negotiated as an alternative to the shutdown of an entire shift.

Volkswagen has nearly 8,200 employees at its Sao Bernardo do Campo plant near Sao Paulo, with 4,500 of them working on the assembly line.

(Reporting by Alberto Alerigi Jr.; additional reporting by Rodrigo Viga Gaier; writing by Gabriel Araujo; Editing by Sam Holmes)