Covid-19 impact: Ford announces closing of Brazil manufacturing operations

Andrew Cummings
January 14, 2021

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.

Thousands of workers on Tuesday protested the pending closure of carmaker Ford's three Brazilian factories at the cost of some 5,000 jobs.

He said the company was moving to a "lean, asset-light business model".

Ford's decision caused political stir in Brazil.

The cuts are part of an US$11 billion global restructuring started under former Chief Executive Officer Jim Hackett and now continued by his successor, Jim Farley.

Rodrigo Maia, the opposition speaker of Brazil's lower house of parliament, said the closures were a "demonstration of the lack of credibility of the Brazilian government, clear rules, legal certainty and a rational tax system".

In response to Maia, however, Ministry of Communications executive secretary Fabio Wajngarten said the United States automaker "closed factories in the (whole) world because it will focus its production on SUVs and pickups, (which are) more profitable".

"It was shocking news, the worst possible", said Felipe Monteiro, a 34-year-old electronic technician and father of two who has worked at the Taubate factory for 16 years.

"This is not good news".

It was said that while the operations will be halted, some sections of the production will continue for a few more months to sustain inventories for aftermarket sales. Ford made a lot of money in Brazil. The closures mean the Ford EcoSport, Ka, and T4 will leave the South American market.

The latest plant closings come after Ford shut a heavy-duty truck factory in Brazil in 2019, taking a $460 million charge. "I think it could have delayed and waited, as our consumer market is much larger than others", Mourao said. The automaker has announced it will cease all production in Brazil. Ford Brazil will maintain its product development centre in Bahia, its proving ground in Tatuí, São Paulo, and its regional headquarters in São Paulo.

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