Ford charges $ 4.1 billion to shut down Brazilian manufacturing operations

DETROIT / SAO PAULO (Reuters) – Ford Motor Co said on Monday that it would close three of its plants in Brazil this year and charge a pretax fee of about $ 4.1 billion in the form of the COVID-19 epidemic, which allowed the company to increase its manufacturing capacity Be amplified under the use of.

FILE PHOTO: The Ford logo is depicted at the 2019 Frankfurt Motor Show (IAA) in Frankfurt, Germany. REUTERS / Wolfgang Ratte / File Photo

Production will cease at Ford’s plants in Camaçari and Taubaté, with production continuing for a few months after production continues for a few months. The troller plant in Brazil’s horizon will continue to operate until the fourth quarter.

Ford officials said the action was part of a $ 11 billion global restructuring previously undertaken by the US automaker, of which it accounted for $ 4.2 billion during the third quarter of 2020. Ford shares were up 3.0% in afternoon trading.

The plant closure affects about 5,000 employees, mostly in Brazil, Ford spokesman TR Reid said on a conference call with reporters.

Ford said industry vehicle sales fell 26% in Brazil last year and are not expected to reach 2019 levels by 2023, with an emphasis on low-profit fleet sales.

Ford CEO Jim Farley said in a statement, “We know these are essential tasks to build a very difficult, but healthy and sustainable business.” “We are moving towards a leaner, asset-light business model by ceasing production in Brazil.”

Ford officials said the plant closure is part of the company’s strategy to achieve an 8% global operating margin. Ford, which has operated in Brazil for more than a century, has begun discussions with its unions and others about layoffs.

Last month, Ford signaled another retreat in a developing market after the Michigan-based company Dearborn closed its auto joint venture with Mahindra & Mahindra Ltd of India.

As a result of the closure of the plant, the Ford EcoSport SUV, Ka subcompact car and T4 SUV will cease sales in South America once the inventory is sold.

Ford maintains a plant in Argentina and in Uruguay.

Ford said it would maintain its product development center in Bahia, its proving grounds in Tatu, its regional headquarters in Sao Paulo and Sao Paulo.

Of the $ 4.1 billion charges, Ford said it expects a record $ 2.5 billion in the fourth quarter of 2020 and $ 1.6 billion in 2021. These charges include about $ 1.6 billion in noncash charges and the rest of the cash, trimmed to cover primarily in 2021.

Reporting by Ben Kelman of Detroit and Alberto Allergy in São Paulo; Editing by Franklin Paul, Matthew Lewis and Chizu Nomiyama


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