Ford shuts down its Brazil manufacturing plants amid the COVID-19 pandemic

Ford shuts down its Brazil manufacturing plants amid the COVID-19 pandemic

Vehicle production at the brand's Camaçari and Taubaté sites has stopped with immediate effect, although each will continue to produce parts for several months to support the aftermarket, while the Troller SUV production line will remain open until the last quarter of this year.

The cost-cutting is aiming to achieve an 8% EBIT (earnings before interest and taxes) as well as greater free cash flow, in part to boost Ford's long-flagging stock price. The closures mean the Ford EcoSport, Ka, and T4 will leave the South American market.

As a result of the plant closures, Ford will end sales in South America of EcoSport SUV, Ka subcompact auto and T4 SUV once inventories are sold.

Ford said it would work with unions to develop an "equitable and balanced plan" to mitigate the impact of the closures on workers.

A "sustained unfavorable economic environment and the additional burden of the pandemic made it clear that much more was necessary to create a sustainable and profitable future", added Ford's South America head Lyle Watters.

"The Covid-19 pandemic increased the industry's persistent idle capacity and the drop in sales, resulting in years of significant losses", it said.

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"We're moving to an agile and lean business model by ending production in Brazil, serving our consumers with some of the most exciting products in our global portfolio".

A Ford spokesperson in the USA replied to Bolsonaro's accusations by saying: "The decision by Ford Brazil and circumstances behind it speak for themselves". The country's lower house Speaker Rodrigo Maia said on Twitter that the closings are "a sign of the lack of credibility of the Brazilian government". Ford made a lot of money in Brazil.

In 2019, the company closed its factory in Sao Bernardo de Campo after 52 years in operation, affecting some 2,800 workers.

"It is not good news".

"We will work earnestly with unions, employees and other stakeholders to develop measures to help deal with the hard impact of this announcement". And with these new closures, it will maintain in the country only Ford's administrative headquarters for South America, in the São Paulo capital, the Evidence Center in Tatuí (SP) and the Product Development Center in Bahia.

In 1919, Ford was the first automaker to install plants in Brazil in what was perceived as a landmark of industrialization in the country, which then imported practically all manufactured products.

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