Ford To Close Brazil Manufacturing Operations, Take $4.1 Billion In Charges
DETROIT/SAO PAULO: Ford Motor Co stated on Monday it will close its three plants in Brazil this year and take pretax charges of about $4.1 billion as the COVID-19 pandemic enhanced the business’s under use of its manufacturing capacity.
Production will stop immediately at Ford’s plants in Camaçari and Taubaté, with some parts production continuing for a couple of months to support inventories for aftermarket sales. The Troller plant in Belo Horizonte, Brazil, will continue to run until the 4th quarter.
Ford officials said the action belonged to the $11 billion international restructuring formerly anticipated by the U.S. car manufacturer, of which it had accounted for $4.2 billion through the 3rd quarter of2020 Ford shares closed up more than 3%.
The plant closures impact about 5,000 employees, mainly in Brazil, Ford spokesperson T.R. Reid said on a conference call with press reporters.
Market lorry sales fell 26% in Brazil last year and are not expected to rebound to 2019 levels up until 2023 with an emphasis on less profitable fleet sales, Ford said.
” We know these are extremely tough, however required, actions to develop a healthy and sustainable company,” Ford Chief Executive Jim Farley said in a declaration. “We are relocating to a lean, asset-light company model by stopping production in Brazil.”
Ford officials said the plant closures become part of the business’s method to attain 8% international operating margins. Ford, which has operated in Brazil for more than a century, has actually started conversations with its unions and others about the layoffs.
Brazil’s Economy Ministry lamented Ford’s choice to end production in the nation and stated it enhanced the need for reforms to improve business climate.
In Camaçari, in northeastern Brazil, the union called an emergency meeting at the factory gates at the very first shift on Tuesday to take a stance on the loss of 4,059 tasks.
” This extremely difficult blow took us by surprise. We never imagined that Ford might close its factories in Brazil,” said union leader Julio Bonfim in a video message to the employees.
The closures marked another retreat by Ford in a developing market after the Dearborn, Michigan-based business last month aborted its vehicle joint endeavor with India’s Mahindra and Mahindra Ltd.
As an outcome of the plant closures, Ford will end sales in South America of EcoSport SUV, Ka subcompact automobile and T4 SUV as soon as inventories are offered.
Ford retains a plant in Argentina and another in Uruguay.
Ford stated it will preserve its product development center in Bahia, its proving ground in Tatuí, São Paulo, and its regional headquarters in São Paulo.
Of the $4.1 billion in charges, Ford stated it expects to tape about $2.5 billion in the 4th quarter of 2020 and about $1.6 billion in2021 The charges include about $1.6 billion in noncash charges and the rest in cash, mostly in 2021 to cover the layoffs.
Disclaimer: This post has actually been auto-published from a company feed without any modifications to the text and has not been evaluated by an editor
( the heading, this story has not been published by Important India News staff and is published from a syndicated feed.).