Ford Restructures South American Operations

Ford ceases production in Brazil after over 100 years

Ford Motor Co.is ceasing manufacturing operations in Brazil after more than 100 years of building cars in the country as part of a restructuring that will eliminate 5,000 jobs and result in about a $4.1 billion charge.

On Monday, Ford said it planned to stop operations at its Camaçari and Taubaté plants immediately, though some production of parts will continue for a few months to support inventories. The Troller plant in Horizonte will continue to operate until Q4 2021.

Commenting on the closure of three factories, Rodrigo Maia said Ford's move just demonstrates a lack of credibility to the Brazilian government. The closures mean the Ford EcoSport, Ka, and T4 will leave the South American market.

Ford was also quoted saying at its statement released earlier in the day that the sales of its vehicles took a tattering header of 26 per cent in Brazil previous year and the American automaker was not expecting a rebound in sales at least until 2023. It came in fifth place in sales of passenger cars and light commercial vehicles, behind General Motors (17.35%), Volkswagen (16.8%), Fiat (16.5%), and Hyundai (8.6%).

Ford has had difficulties internationally for some time and recently only made profits in its U.S. home market.

"With more than a century in South America and Brazil, we know these are very hard, but necessary, actions to create a healthy and sustainable business".

The COVID-19 pandemic has "intensified persistent industry idle capacity and slow sales that have resulted in years of significant losses", said the statement. "We are moving to an agile and lean business model by ending production in Brazil".

"This is not good news. I think it could have delayed and waited, as our consumer market is much larger than others", Mourao said. And with these new closures, it will maintain in the country only Ford's administrative headquarters for South America, in the São Paulo capital, the Evidence Center in Tatuí (SP) and the Product Development Center in Bahia.

Unions of two units that will be closed said around 4,800 workers between them are affected.

Ford's decision caused political stir in Brazil.

Brazil's Economy Ministry lamented Ford's decision to end production in the country and said it reinforced the need for reforms to improve the business climate.

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