Q24N – Ford Motor Co announced this Monday, January 11, the end of all its vehicle production operations in Brazil, in 2021, as part of a restructuring plan in South America, a region that it will supply from Argentina, Uruguay and other markets.
The company said the COVID-19 pandemic amplified the company’s underuse of its manufacturing capacity.
Production will cease immediately at Ford’s plants in the country: Camaçari and Taubaté, with some parts production continuing for a few months to support inventories for aftermarket sales; the Troller plant in Belo Horizonte will continue to operate until the fourth quarter.
Ford officials said the action was part of the US$11 billion global restructuring previously forecast by the U.S. automaker, of which it had accounted for US$4.2 billion through the third quarter of 2020. Ford shares closed up more than 3%.
The plant closures affect about 5,000 employees, mostly in Brazil, Ford spokesman T.R. Reid said on a conference call with reporters.
“We know these are very difficult, but necessary, actions to create a healthy and sustainable business,” Ford Chief Executive Jim Farley said in a statement. “We are moving to a lean, asset-light business model by ceasing production in Brazil.”
Brazil’s Economy Ministry told Reuters it lamented Ford’s decision to end production in the country and said it reinforced the need for reforms to improve the business climate.
The closures marked another retreat by Ford in a developing market after the Dearborn, Michigan-based company last month called off its auto joint venture with India’s Mahindra and Mahindra Ltd.
Ford said it will maintain its product development center in Bahia, its proving ground in Tatuí, São Paulo, and its regional headquarters in São Paulo.
Ford retains a plant in Argentina and another in Uruguay.