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August 23, 2014
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Report: labour market remains steady

The ACARA Dealerships Asociation does not see the plunge in sales ending in the near future, saying it will likely continue for the rest of the year.

Most firms plan to keep number of employees as worries grow over auto sector

The labour market has remained stable in the first quarter of the year and will show a similar trend over the next few months, according to a report published yesterday by labour consultancy firm Adecco. The report comes at a time of increased concern about the future of the country’s auto sector with as many as 15,000 workers affected by measures to cut their hours, as the decrease in sales is expected to continue until the end of the year.

Yet despite this sector-specific concern, Adecco said 71 percent of the companies expect to maintain their current staff this year, while 15 percent believe they will decrease their staff and 14 percent said they foresees adding jobs.

The survey was carried out among small, medium and large-sized companies nationwide, of which 86 percent said their workers will see wage increases this year. Up to 49 percent of the firms will give raises of between 20 and 25 percent, while 26 percent will increase wages between 25 and 30 percent and 11 percent between 15 and 20 percent.

“The labour market remained stable in the first quarter of the year and Argentina has an unemployment rate of 7.5 percent. Despite the drop registered on the vehicle sector, jobs are in a normal range,” Herve Pollet, head of Adecco Argentina and leader of the survey, said yesterday.

While Adecco anticipated a stable scenario for the labour market for the rest of the year, the Association of Argentine Car Dealerships (ACARA) said the vehicle sector is going through a crisis “similar or bigger” than the one that took place in 2009 and anticipated the second semester “won’t be any better than the first.”

“We see a market with 600,000 units sold this year. We don’t see an improved second semester so far. Premium dealerships are going through a difficult situation and the scenario isn’t good in the short-term,” Horacio de Lorenzi, head of ACARA, said yesterday. “It’s hard to know which units will be available to sell this year and that uncertainty has a negative effect on sales.”

De Lorenzi anticipated May sales figures of dealerships will be the worst since 2011, when 67.985 were sold, and said so far this month 36,890 vehicles have been sold, 38.58 percent less than in 2013. The daily average of sales now clocks in at 2,700 units, a figure that represents a 36 percent drop compared to the same month last year.

‘I’m mad as hell’

The head of the Auto Workers’ Union (SMATA) Ricardo Pignanelli agreed with the pesimistic projections for the sector, saying yesterday he was “mad as hell” because of the 15,000 workers who have been temporarily suspended due to the drop in sales on the domestic market and the smaller rate of exports.

“When my patience ends, I will take a different path. I am looking at all possible scenarios because when they touch workers it’s as if they were touching my kids,” Pignanelli said, hinting at the possibility of strikes. “I will have a clearer picture in July regarding what will happen with the sector for the rest of the year.”

Pignanelli said “workers have been suspended in several factories” and asked the government to reduce interest rates on loans to buy cars since “nobody is going to buy a car on installments” with the current rates. Such measure would allow for the sale of an additional “80,000 or 100,000 units,” according to Pignanelli.

The crisis in the sector was evident yesterday at the auto parts firm Gestamp, where a group of 67 workers who had been laid off entered the factory in Escobar and carried out a protest. The company said its plant was “violently taken over by unidentified people” and a “security guard was assaulted.”

Responding to the scenario in the vehicle sector, Cabinet Chief Jorge Capitanich said the government “is taking all the necessary steps” to reach a “recovery” in the sector and highlighted the upcoming trade deal on vehicles that will be signed with Brazil, Argentina’s main vehicle market.

“Not all companies show the same scenario. There have been suspensions but there will a recovery of the domestic market and of vehicle exports since all the necessary steps are being taken to achieve a recovery of the vehicle sector,” Capitanich said at his usual morning press conference.

Herald with DyN,Télam

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