Ford to close factories in Brazil

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Sao Paulo | The American automaker Ford announced Monday the closure of its last three factories in Brazil, with the key to nearly 5,000 layoffs, in a sector plunged into crisis by the COVID-19 pandemic.

“Ford will cease production (…), the pandemic has only increased unused production capacity and the reduction in sales has caused years of significant losses,” the company said in a statement.

This restructuring will represent a cost of $ 4.1 billion, including 2.5 in 2020 and 1.6 in 2021, said the manufacturer.

“We know these decisions are very difficult, but necessary, to build a healthy and sustainable business,” company president Jim Farley said in the statement.

In February 2019, Ford had already closed its oldest plant in Brazil, which employed more than 3,000 people in the historic industrial hub of Sao Bernardo do Campo, near Sao Paulo, as part of a global restructuring plan.

“We will be working hard with unions, our employees and our other partners to put in place measures that help deal with the difficult impact of this announcement,” said Lyle Watters, CEO of Ford in America from South.

The car manufacturer specified that production would cease “immediately” in the factories of Camaçari (north-east) and Taubaté (south-east), and that “only the manufacture of certain parts would be maintained for a few months to ensure service afterwards. -sale”.

The Horizonte plant, in the state of Ceara (northeast), will continue to operate “until the fourth quarter of 2021”.

Ford Brazil will only maintain its administrative headquarters, product development center and testing ground.

On the other hand, the production plants in Argentina, as well as a factory project in Uruguay will not be affected by this plan, nor the sales activities elsewhere in South America, specified the manufacturer.

“The automotive sector has experienced strong consolidation in recent years. General Motors in particular took aggressive steps to pull out of markets that didn’t make financial sense. Ford’s withdrawal from Brazil confirms that they are ready to make the same decisions concerning poorly performing markets, ”Karl Brauer, analyst for the specialized site, told AFP.

In general, Ford is turning away from the manufacture of city cars and sedans to concentrate on the production of pickups and trucks, more profitable and particularly popular in the United States today.

The group is also putting the accelerator on electric vehicles, notably with the upcoming launch of the Ford Mustang Mach-E.

The announcement had the effect of a bomb in Brazil where the manufacturer has been present since 1921.

“It is not good news. Ford made a lot of money in Brazil. (…). I think they could have delayed their decision and waited, because our consumer market is more important than others, ”reacted Brazilian vice-president Hamilton Mourao on CNN Brazil.

The sale of new vehicles in Brazil fell 26% in 2020 compared to the previous year due to the COVID-19 crisis.

In April, at the height of the restrictions put in place to try to stem the pandemic, automobile production was practically at a standstill (-99% compared to March), before gradually resuming.

Brazil is hit hard by a second wave of COVID-19 contamination, with more than 203,000 dead, the second worst death toll after the United States.

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