| BUENOS AIRES
BUENOS AIRES Feb 10 Argentina's government
plans to sign by the end of March an agreement with the auto
sector and unions to lower labor costs, improve productivity and
attract investment, an executive and a government source told
The agreement is part of center-right President Mauricio
Macri's broader labor reform effort as he tries to attract
investment and pull Latin America's No. 3 economy out of
In the auto sector, which mostly serves to export cars to
Brazil, the goal is to reduce the number of working days
employees skip. Currently employers are powerless when up to 10
percent of their staff routinely does not show up.
"We are very advanced," a source from the production
ministry told Reuters of the agreement on condition of anonymity
to discuss continuing negotiations.
Argentina hopes the sector, hit by a prolonged recession in
Brazil in recent years, can double actual production by 2023 to
1 million vehicles per year. Brazil buys about 70 percent of
"We are seeing what steps we can take to meet our goal and
improve productivity," said Daniel Afione, general manager of
corporate affairs at Toyota's Argentina unit, who participated
in the negotiations. He said he expected an agreement in
February or March.
Toyota Motor Corp, which in recent years invested
more than $800 million in a plant in Buenos Aires province, was
able to reduce absenteeism through dialogue with unions and with
an incentive system, Afione said.
The government source said the agreement would bring some $5
billion of investment to the sector in the next two years,
including investment $800 million already announced by Renault
Last year Macri's government passed a law giving fiscal
benefits to automakers that use more parts made in Argentina and
extended a bilateral trade deal with Brazil until 2020.
"You have the certainty over the relation with Brazil, you
have the law of auto parts and now the union component that was
not there last year," the source said.
The sector's main union said workers are willing to work
toward improving production as long as doing so does not violate
"Our union is committed to the premise of working to achieve
common goals," Ricardo Pignanelli, secretary general of the
SMATA union, said in an email to Reuters.
(Writing by Caroline Stauffer; Editing by Bill Trott)