A Ford factory in Bahia, Brazil, in July 2015.Paulo Fridman / Getty
Ford announced Monday that it will close its three factories in Brazil this year.
The US company justified the decision due to the effect of the covid-19 pandemic, which produced a marked underutilization of its installed capacity in the South American giant.
The closure will affect some 5,000 employees, most of them in three Brazilian cities, but also in Argentina, although the company has not provided further details.
Activity will cease immediately at Ford's plants in Camaçari, in Bahia, and Taubaté, in the interior of São Paulo.
Production of some parts will continue for a few months to maintain inventories for aftermarket sales.
The Troller plant, in the city of Horizonte, in Ceará, will continue to operate until the fourth quarter.
"With more than a century in South America and Brazil, we know that these are very difficult actions, but necessary, to create a healthy and sustainable business," said the president and CEO of Ford, Jim Farley, this Monday.
The company has indicated that despite the cessation of production in the South American country, it will maintain its product development center in the state of Bahia, as well as its testing center in Tatuí and its regional headquarters in São Paulo.
The portfolio of electrified SUVs, trucks and commercial vehicles will be supplied from Argentina, Uruguay and other markets in the region, according to the statement.
Ford's departure is a defeat for the Brazilian government at a time of high unemployment (the rate reached 14.2% last November, which means that some 14 million people are out of work) and after years in which the company was the recipient of public subsidies to support its permanence in the country.
By 2019, Ford had already closed its industrial complex in Sao Bernardo do Campo, its oldest factory in Brazil, affecting some 2,800 workers.
Beyond the situation of Ford, which has lost ground in the Brazilian market in recent years, car sales have suffered a general drop of 26.2% in 2020, according to the Brazilian Anfavea (National Association of Manufacturers of Motor Vehicles) due to the pandemic.
The operation to leave Brazil will produce pre-tax charges of approximately 4,100 million dollars (3,369.7 million euros), of which 2,500 million (2,054 million euros) will impact the 2020 accounts and the remaining 1,600 million dollars (1,315 million euros) will be recorded in 2021. The charges will include around 1,600 million dollars (1,315 million euros) of non-cash charges related to the cancellation of certain accounts receivable from taxes and for episodes of depreciation and amortization. Remaining charges of approximately $ 2.5 billion (€ 2.054 billion) will be paid in cash, primarily in 2021.
