Thursday, 28 January, 2021

Ford to End Manufacturing in Brazil, Take $4.1 Billion Charge

Ford Brazil Ending Manufacturing Operations, Troller T4 Will Cease Production Ford Ceases All Production In Brazil As It Moves To Restructure Its South American Operations
Ginger Lawrence | 14 January, 2021, 23:06

United States carmaker Ford announced Monday it would cease production in Brazil and close its three remaining plants there after more than 100 years of operating in the country. These closures will affect about 5,000 employees and Ford will stop selling cars like the EcoSport and Ka in South America once stocks are cleared.

"Specificially, the company says the pandemic has amplified "...persistent industry idle capacity and slow sales that have resulted in years of significant losses".

Production at Camacari and Taubate would cease immediately, except for manufacturing of some parts which would continue for a few months.

Chief executive Jim Farley said it was a "very hard but necessary" decision.

Ford will serve the region from its global product portfolio, including some of its most popular vehicle lines such as the all-new Ranger pickup built in Argentina, new Transit van, Bronco and Mustang Mach 1, and plans to accelerate the introduction of several new connected and electrified models.

The company's Bahia product development centre, Tatuí proving ground and São Paolo regional headquarters won't close.

Ford's factory closure in Brazil will affect about 5,000 workers     AFP  File
Ford's factory closure in Brazil will affect about 5,000 workers AFP File

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

J.P. Morgan analyst Ryan Brinkman said in a note the move came at a time when investors had been complaining of the absence of a path to profitability for the South American businesses.

As a result of the plant closures, Ford will end sales in South America of EcoSport SUV, Ka subcompact auto and T4 SUV once inventories are sold.

The Ministry of Economy said in a statement that it regrets what it called "Ford's global and strategic decision". The country's lower house Speaker Rodrigo Maia said on Twitter that the closings are "a sign of the lack of credibility of the Brazilian government". "We never imagined that Ford could close its factories in Brazil", said union leader Julio Bonfim in a video message to the workers.

Industry vehicle sales fell 26 per cent in Brazil past year and are not expected to rebound to 2019 levels until 2023 with an emphasis on less profitable fleet sales, Ford said. The automaker has announced it will cease all production in Brazil.

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