Employees of the American company Ford demonstrate at the Camacari plant this Tuesday, the day after the company announced the end of its production in Brazil.RAFAEL MARTINS / AFP
Ford announced Monday that it is closing its three factories in Brazil.
The decision, part of the global restructuring of the US firm that promoted the popularization of the automobile, implies the loss of 5,000 jobs, is a blow for the Bolsonaro government and a humiliation for Brazilian pride because it will concentrate South American production in Argentina and Uruguay.
The departure of the first large automobile company installed in Brazil, where it arrived 101 years ago, is also the end of an era that included the failed dream of building a factory-city in the heart of the Amazon.
Saying goodbye to Brazil, where it will maintain a regional headquarters, will cost the company 4.1 billion dollars (3.4 billion euros).
Two of the plants, those located in Camaçari (Bahia), which produces the Ka and EcoSport models, and in Taubaté (São Paulo), a manufacturer of engines and transmissions, will definitively stop production now.
The third, in Horizonte (Ceará), where a jeep model comes from, will operate until the end of the year.
This end was seen to come since in 2019 Ford closed its oldest factory, in the industrial belt of São Paulo.
In any case, it is a blow due to the impact on direct and indirect jobs, on tax collection and for what it means for confidence in the economic recovery after the pandemic.
It is not the only recent casualty.
Mercedes Benz stopped producing here last month.
The coronavirus made 2020 an especially catastrophic year for the auto industry around the world.
The pandemic brought about the almost total paralysis of the 65 manufacturing companies in Brazil, so that in April - the first full month of confinement - fewer than 2,000 cars left their plants.
The sector closed 2020 with a 26% drop in sales, above the global average.
Added to this are structural issues such as the high cost of producing in Brazil due to its protectionist laws and labor rights, in addition to the highly complex tax system, which requires a company to dedicate 1,500 hours per year to pay taxes.
“The high Brazilian tax burden makes the difference when making decisions.
The cost of each car produced here, for example, only doubles due to taxes, "recalled the industrial association Fiesp when commenting on" the sad news. "
The accounts do not come out to Ford despite the fact that Brazil is a succulent market thanks to its 210 million inhabitants.
The vice president, Hamilton Mourão, stressed on Monday that "the company has made a lot of money in Brazil and could have waited even because our market is much larger."
Ford has lost market share to become the fifth largest brand in volume in a country that has also had income frozen for six years.
The transfer of Ford production to neighboring countries also calls into question the generous subsidies invested in the sector in recent decades, which according to specialists such as the economist Marcos Lisboa increased dependence on companies and reduced their productivity.
And it is a blow to the liberalizing discourse of the Government led by Jair Bolsonaro.
"It is out of tune with the strong recovery of the [industrial] sector," declared the Minister of Economy, Paulo Guedes, who has been trying for months to speed up the processing of two far-reaching reforms, the tax and the public function.
Because of the pandemic Bolsonaro, who came to power with plans to thin the state as much as possible, launched one of the largest direct aid programs in the world.
The economic outlook is bleak.
The Cabinet starts 2021 under the threat of the fiscal crisis - the public debt exceeds 100% due to coronavirus aid -, with unemployment soaring to 14% (14 million unemployed), millions of people at risk of falling back into extreme poverty and inflation of 4.5%, a record.
Alex Agostini, chief economist at Austin Rating, explains that “of course, the exit opens your eyes to see if any other large companies are also leaving.
The impact on jobs at factory locations is great, but not nationally.
But there are satellite component companies, so the impact on the production chain is very large. "
Ford's century-old history in the South American giant includes an exotic episode.
In the 1920s, shortly after landing in Brazil, its founder, Henry Ford, promoted the creation of a city in the heart of the Amazon.
Christened Fordlandia, the remains of the dilapidated buildings still stand in the middle of the jungle as a reminder of a great unfulfilled dream.
The city was built on the banks of the Tapajos River as a large rubber production plant as well as a home for employees, but the arrival of synthetic rubber and the remoteness of the place ruined the ambitious project.