http://www.reuters.com/article/marketsNews/idUSN2148529620090121

SAO PAULO, Jan 21 (Reuters) - Italian automaker Fiat (FIA.MI) has placed 800 workers at its main plant in Brazil on leave for 10 days to cut output in a bid to reduce a build-up in inventory, the company said on Wednesday.

The workers account for nearly 5 percent of the 15,000 total at Fiat's sprawling factory in Betim, outside the capital of Minas Gerais state.

"The reason for the collective holidays is to adjust output plans to meet demand," Fiat's media department said, adding that the automaker has no plans to cut its workforce or to put any more workers on paid leave.

The local metalworkers' union, however, said that Fiat and its suppliers in the area had recently laid off an additional 599 workers. Fiat would not confirm the layoffs, saying any job cuts will be detailed in its annual report in February.

Fiat produced about 3,000 vehicles a day at the plant before credit in Brazil dried up because of the global liquidity crunch and reduced demand for cars and trucks. Daily output has been reduced to 2,400, the union said.

The company earlier this year eliminated a third shift at the plant, transferring the workers to the first and second shifts, the union said.

Automobile production in Brazil plunged 47.1 percent in December from November, after tumbling 34.4 percent the previous month, as Fiat, U.S.-based General Motors Corp (GM.N) and Germany's Volkswagen AG (VOWG.DE) sought to reduce inventory.

The decline in vehicle output has prompted companies such as auto parts maker Magneti Marelli Cofap to cut 800 jobs, equivalent to 10 percent of its workforce, last week. GM also dismissed 744 temporary workers at a plant in Sao Paulo state last week.

Brazil is Fiat's second-biggest market after Italy, accounting for more than 30 percent of its sales globally and the bulk of its profits. (Reporting by Alberto Alerigi Jr and Marcelo Portela, Writing by Elzio Barreto, Editing by Gunna Dickson and Gerald E. McCormick)