DETROIT (Reuters) – Ford Motor Co said on Monday that it will close its three factories in Brazil this year and assume pre-tax charges of about $ 4.1 billion, as the COVID-19 pandemic has increased the use of its production capacity by the company.
Production will cease immediately at Ford’s plants in Camaçari and Taubaté, with the production of some parts continuing for a few months to sustain inventories for aftermarket sales. The Troller plant in Horizonte, Brazil, will continue to operate until the fourth quarter.
Ford officials said the action was part of the $ 11 billion global restructuring previously foreseen by the U.S. automaker, of which it represented $ 4.2 billion by the third quarter of 2020.
Factory closures affect about 5,000 employees, mainly in Brazil, Ford spokesman TR Reid said in a conference call with reporters. Industry vehicle sales fell 26% in Brazil last year and are not expected to recover to 2019 levels until 2023, with an emphasis on less profitable fleet sales, Ford said.
“We know that these actions are very difficult, but necessary to create a healthy and sustainable business,” said Ford Chief Executive Jim Farley in a statement. “We are moving to a lean business model with few assets, ending production in Brazil.”
With the departure of manufacturing in Brazil, Ford maintains a factory in Argentina and another in Uruguay.
Reporting by Ben Klayman in Detroit; Franklin Paul and Matthew Lewis edition