Industrial districts in the Brazilian automotive industry have facilitated just-in-time production, functional flexibility and compatibility of HR practices since the 1980s. However, this model has been threatened by global over-capacity and the rise of low-cost suppliers in South Korea and China. This paper develops literature on proximity dynamics though exploring the influence of global supply chains on HRM in industrial districts. The more specific research questions are: How viable are industrial districts in the context of global crises? And how is this viability bound up with the awareness of HR practices down the supply chain? The findings indicate that the industrial districts model is under threat. In the context of global supply chains, automotive majors have shifted costs onto their suppliers, disrupting established relationships, and moreover, they often lack knowledge of the employment practices of distant suppliers. Yet, in times of political and economic uncertainty, worker rights might be best served by geographical and cognitive proximity.