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Ford To Close Century-old Manufacturing Operations In Brazil

ford jan12 lt

Ford Motor will close manufacturing operations in Brazil, where it has been operating since 1919 and expects to take pre-tax charges of about $4.1 billion as the COVID-19 pandemic increased persistent industry idle capacity and slow sales. The action could reportedly affect about 5,000 jobs, mostly in Brazil.

However, the company will keep South America headquarters, product development center and proving grounds in Brazil. Meanwhile, manufacturing operations in Argentina and Uruguay and the sales companies in other South America markets will not be affected, Ford said in a statement.

"With more than a century in South America and Brazil, we know these are very difficult, but necessary, actions to create a healthy and sustainable business," said Jim Farley, Ford president and CEO.

The automaker said that it will stop production immediately at Camaçari and Taubaté in Brazil, with some parts production continuing for a few months to support inventories for aftermarket sales. The Troller plant in Horizonte, Brazil, will continue to operate until the fourth quarter of 2021.

As a result, the company will end sales of EcoSport, Ka and T4 once inventories are sold.

Ford stated that it will continue to facilitate possible reasonable alternatives for interested parties to take over available production facilities.

The company will serve the South America region from its global product portfolio, including some of its most popular vehicle lines such as the all-new Ranger pickup built in Argentina, new Transit van, Bronco and Mustang Mach 1. It plans to accelerate the introduction of several new connected and electrified models, Ford said.

The company noted that it maintains full customer support operations with sales, service, aftermarket parts and warranty support in Brazil and South America. It will also maintain its product development center in Bahia, its proving ground in Tatuí, São Paulo, and its regional headquarters in São Paulo.

As a result of the latest announcement, Ford now expects to record pre-tax special item charges of about $4.1 billion, including about $2.5 billion in 2020 and about $1.6 billion in 2021.

Ford said it is evaluating its businesses around the world, including in South America, to help the company's plan to achieve an 8 percent adjusted EBIT margin and generate consistently strong adjusted free cash flow.

In August 2020, Ford had plans cut about 1,000 salaried jobs in North America as part of an $11 billion global restructuring plan that was started two years ago. It was in addition to 2,300 previously announced salaried job reductions.

In 2019, Ford reduced its manufacturing footprint and eliminated thousands of jobs in Europe.

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