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Ford Decides To End Local Vehicle Manufacturing In India; Approx. 4,000 Employees To Be Affected

Ford (F) has decided to end vehicle manufacturing in India. The company will wind down vehicle assembly in Sanand by the fourth quarter of 2021 and vehicle and engine manufacturing in Chennai by the second quarter of 2022. Approximately 4,000 employees are anticipated to be affected by the restructuring.

Ford said sales of current products such as Figo, Aspire, Freestyle, EcoSport and Endeavour will cease once existing dealer inventories are sold. However, the company will continue full customer support operations for these vehicles. Ford will begin importing and selling its iconic vehicles, including Mustang coupe.

"Despite investing significantly in India, Ford has accumulated more than $2 billion of operating losses over the past 10 years and demand for new vehicles has been much weaker than forecast," said Jim Farley, Ford Motor CEO.

In connection with the restructuring, Ford currently expects to record pre-tax special item charges of about $2.0 billion, including about $0.6 billion in 2021, about $1.2 billion in 2022 and the balance in subsequent years. The cash charges of about $1.7 billion will be paid primarily in 2022.

Going forward, Ford will focus on growing its Ford Business Solutions capabilities and team in the country, as well as engineering and engine manufacturing for export.

Shares of Ford were down 1.2% in pre-market trade on Thursday.

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