Automaker Ford will shut down all its manufacturing facilities in Brazil, the company said this week. The decision will cost the company $4.1 billion in non-recurring expenses for both the 2020 and 2021 financial years.
The company said it will immediately suspend activities at its Camaçari and Taubaté plants, in the states of Bahia and São Paulo, respectively. Ford will also shut down manufacturing activities at its Troller plant in Horizonte, in the state of Ceará, by Q4 2021.
Ford said it will produce auto parts at its Camaçari and Taubaté plants for just “a few months” to guarantee the availability of inventory for its after-sales taskforce in Brazil. Ford will also terminate domestic sales of its Eco Sport, KA and T4 models, until it sells all its inventory. Activities at Ford’s manufacturing facilities in Argentina and Uruguay won’t be affected, the company said.
Ford said the decision was due to weak sales volumes and output levels in the post-Covid scenario, which resulted in “years of significant losses.”
“These (decisions) are very tough, but needed to create a healthier and sustainable business,” said CEO, Jim Farley.
Ford will maintain in Brazil its South America headquarters, a product development center and a testing facility. Output will be shifted to Argentina, Uruguay and Ford’s “other markets” in the region.
The company didn’t immediately disclose details about layoffs, but thousands are likely to be affected. According to a local union, Ford employs about 7,000 workers in Brazil.