STUTTGART -- Mercedes Car Group's factory in Brazil has landed a new job, reducing fears that the plant will be closed.
"We have started production of the C class as CKD (complete knockdown) assembly at Juiz da Fora," Mercedes Car Group Production Chief Hans-Heinrich Weingarten told Automobilwoche, Automotive News Europe's sister publication.
About 1,000 workers are expected to assemble up to 16,000 units a year that will be sold in the US.
"This will enable us to operate the factory at full capacity," Weingarten said.
In April, Mercedes parent DaimlerChrysler announced it would stop building the A class at the plant and that it had killed plans to make the Smart Formore SUV there, leaving the plant with no work. The announcement sparked protests at the 9-year-old plant that employees 1,160 people.
The Mercedes Car Group, which includes the Mercedes, Smart and Maybach brands, built about 1.1 million cars in 2004. Production in 2005 will be "slightly above last year," said a high-ranking D/C executive.
With a CKD assembly plant under construction in China, more growth is possible. In addition, Mercedes is negotiating with Magna Steyr on a new CKD factory in Russia.
"Magna Steyr is a potential partner, but we are undertaking talks with a number of interested parties," Weingarten said.
It isn't clear whether Mercedes will construct the factory in St. Petersburg, Russia, with a west European or Russian partner.
Before getting started Mercedes also must negotiation with local authorities on issues such as import tariffs for CKD components.
Worldwide, Mercedes employs more than 80,000 people in manufacturing, 77,000 of them in Germany.
"Between 2 and 3 percent of them are part-time employees," Wein-garten said. "We want to raise that figure temporarily, if, for example, we launch a new model. The works council has agreed to that."