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Close three factories Ford stops car production in Brazil

iconJan 12, 2021 10:27

On January 12th Ford said it would stop production in Brazil, close three factories and stop selling well-known models such as the EcoSport in the region to continue the global restructuring plan launched by former chief executive Hankate (Jim Hackett).

The move will cost the company $4.1 billion, of which $2.5 billion will be accounted for in 2020 and another $1.6 billion will be charged to special charges later this year. Company executives say plant closures will help Ford continue to make money in areas where losses have been heavy in recent years.

Ford said its engine plants in Camacari and Taubate in Brazil would stop production immediately and production of some parts would continue for several months to support inventories in the aftermarket. In addition, the company's Troller plant in Horizonte will continue to operate until the fourth quarter. The closure, coupled with Ford's announcement last year of closing another plant in Sao Paulo, Brazil, leaves the company with only two assembly plants in South America.

Once the inventory is sold, Ford will immediately stop sales of the EcoSport, Ka and Troller T4 in South America. The measures will affect about 5000 workers and are part of a $11 billion global restructuring plan announced by Mr Hankett in 2018. Mr Hankett's successor, Jim Farley, has renewed its commitment to bring Ford's global profit margin to 8 per cent.

Ford CEO Jim Farley said in a statement, "given that Ford's operations in South America and Brazil have been going on for more than a century, these measures will be very difficult to implement, but they are also necessary to create a healthy and sustainable business. We are moving to a lean, asset-light business model. "

Despite the closure of the plant, Ford will retain its operations in South America. In Brazil, the company will continue to provide sales, service, after-sales parts and maintenance support. Ford will also retain its product development center in Bahia, a test site in Tatui in Sao Paulo, and its regional headquarters in Sao Paulo.

In addition, Ford's manufacturing operations in Argentina and Uruguay, as well as sales companies in other South American markets, will not be affected. The company said it would continue to offer models such as the Ranger, Transit, Bronco and Mustang Mach 1, as well as "several new connected and electric vehicles".

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