Ford to shut down oldest Brazil plant, quit South America truck biz
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Ford Motor Co said
on Tuesday it will shut down its oldest factory in Brazil and quit its heavy
commercial truck business in South America, a move that could cost more than
2,700 jobs as part of a reestablishment meant to end losses around the world.
SAO PAULO/DETROIT: Ford Motor Co said on Tuesday it will shut down its oldest
factory in Brazil and quit its heavy commercial truck business
in South America, a move that could
cost more than 2,700 jobs as part of a reestablishment meant to end losses
around the world.
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Earlier Ford said the worldwide reformation, to impact thousands of jobs and
possible plant closures in Europe, would result in $11 billion in charges.
Following that announcement, analysts and investors had expected a similar
restructuring in South America.
Ford Chief Executive Jim Hackett said last month that investors would
not have to wait long for the South American reformation plan.
The factory slated for closure is in Sao Bernardo do Campo, an industrial
suburb of Sao Paulo that has operated since 1967. It first produced a number of
auto models before being switched primarily to trucks in 2001. It makes the
F-4000 and F-350 trucks, as well as the Fiesta small car, a sales laggard.
Based in a much newer factory in the north eastern state of Bahia, the factory
closure may mean Ford is refocusing on the core of its car business in Latin
America's largest economy. But the job cuts in Brazil's industrial heartland represent
a psychological blow for the new administration of far-right President Jair
Bolsonaro, which is battling an unemployment rate above 11 percent.
The union in Sao Bernardo did not have an immediate comment. But Sao Bernardo
Mayor Orlando Morando complained angrily that Ford gave no warning and failed
to discuss the closure with the workers.
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"The 2,800 families directly affected and another 2,000 indirectly
affected deserved a chance to react. This is an act of cowardice,"
Morando's office said in a statement.
Ford's latest cuts come as investors watch for signs of advancement on the
company's alliance with Volkswagen AG, which
already encompasses commercial vans and pickup trucks but may soon expand into
electric and self-driving cars. The two automakers have also pledged to work together
on other projects, which could include combining capacity in regions like South
America.
The closure is also a blow to the industrial outskirts of Sao Paulo, where
Brazil's automotive industry was born and
which long drove its industrial growth.
A Ford spokesman declined to provide a precise figure for job cuts but
acknowledged there would be "a significant impact" and said the
automaker would work with unions and other affected parties on "next
steps."
Ford South America President Lyle Watters said on Tuesday the automaker remains
"committed" to South America, a region where it is not currently
profitable.
Sales of Ford cars and light
trucks increased by 10 percent between 2017 and 2018 in Brazil, lagging a 15
percent post-recession grows for the industry as a whole.
In the trucks business, it ranked fourth, with sales less than half those of
Mercedes Benz and Volkswagen.
Ford said in October it would stop building its Focus compact cars in Argentina
in May 2019 as part of efforts to end its losses in the region.
Kleiton Da Silva, an employee and union representative in Ford's surviving
Bahia plant, said the carmaker was in talks to cut 650 of its workforce there,
which the automaker has said totals 4,604.
The No. 2 U.S. automaker expects to record pre-tax special charges of about
$460 million, with most of that recorded this year, it said in the statement.