Chinese automaker Lifan announced that it is withdrawing from the country and will no longer produce vehicles at its San José industrial plant.
The union leader, Ruben Villafan, told The Observer that the decision was communicated on Monday, October 25, during a meeting at the Ministry of Labor and Social Security (MTSS). There were present local representatives of the company, and via zoom authorities of the firm from China.
The decision involves the dismissal of about 60 workers who had been on unemployment insurance for about three years, reported this Wednesday the newspaper Primera Hora de San José.
The company will have to pay around US $ 600 thousand for this concept but, according to Lifan in the MTSS, it only has about US $ 100 thousand for the payment of assets. This point caused surprise in the union, because since 2018 and to date the liquidations of another 60 workers had been carried out normally.
Along these lines, the company announced that in November it plans to carry out an auction of machinery, spare parts and merchandise that are in the industrial plant, with the aim of raising funds. According to Villafan, these assets have a value of between US $ 1 million and US $ 1.5 million.
Days ago an assembly of workers decided to accept the US $ 100,000 on account and set a date for the rest of the payments to be made. That will be discussed in a new meeting that is scheduled for the next few hours at MTSS. As he knew The Observer, The company is expected to officially notify staff on Friday of the withdrawal from the country and the reasons for the decision.
“They had never talked about leaving the country apart from the difficulties in the region. And worse was when they tell us that they do not have all the assets to pay us. In an auction we depend on a third party. If everything is not sold, how do we do it? ”Said Villafan. In this context, the workers’ union plans to request the Minister of Labor, Pablo Mieres, a new extension of the unemployment insurance, until it can get all the money from the dismissals.
On the other hand, industry sources told The Observer that the Chinese automaker added last year to the Geely group as a partner, and that the decision is related to the restructuring and new business plans focused on a repositioning of the brand within the electric vehicle segment.
A history marked by the problems of Brazil
Lifan’s plant in Uruguay inaugurated in 2011 stopped its production in mid-2018 due to the loss of competitiveness in the Brazilian market, the main destination of its exports. At the beginning of 2019, it had communicated its decision to stay in the country pending a rebound in regional demand and while negotiated an agreement with shipowners of other brands.
Even at the end of 2019 The automaker closed a strategic alliance with Brilliance Auto that intended to strengthen its vehicle brand in the region by producing from Uruguay to bet on commercialization in the Brazilian market. The possibility of assembling electric cars was also handled and there were even staff workers who conducted training in that direction. But with the pandemic none of those plans came through.
Previous at the first temporary closure of the plant in 2015After the collapse of the Brazilian market, the Lifan company reached an annual production of 6,400 vehicles. Route 1 plant returned to operation in 2017 with an annual goal of 1,700 vehicles. Finally, in August 2018, it closed its doors, hit by problems of competitiveness and the decline in sales. At its best and prior to several restructurings, it had nearly 400 workers on its staff.
