Ford closes its Brazil plants as sales dip driven by pandemic

Jim Farley

Ford Motor confirmed on Monday it was stopping operations in its major Brazil facilities as pandemic forced the company to implement a global restructuring plan valued at some $11bn. In Brazil alone production will cease immediately at Ford’s plants in Camaçari and Taubaté and the firm will take pretax charges of about $4.1 billion, Reuters reported.

However some car parts will be still produced for a few months to support inventories for aftermarket sales.

The plant closures are expected to affect some 5,000 employees, mostly in Brazil, Ford spokesman T.R. Reid said on a conference call with reporters. Industry vehicle sales fell 26% in Brazil last year and are not expected to rebound to 2019 levels until 2023 with an emphasis on less profitable fleet sales, Ford said.

“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.”

Ford officials said the plant closures are part of the company’s strategy to achieve 8% global operating margins. Ford, which has operated in Brazil for more than a century, has begun discussions with its unions and others about the layoffs.

The closures marked another retreat by Ford in a developing market after the company last month called off its auto joint venture with India’s Mahindra and Mahindra Ltd.

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