Ford to close 3 plants, end production in Brazil, costing $4.1B

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DETROIT — Ford Motor Co. said Monday it will cease vehicle production in Brazil, closing three plants and ending sales of nameplates such as the EcoSport in the region as it continues a global restructuring plan started by former CEO Jim Hackett.

The move will cost the company $4.1 billion, with $2.5 billion booked in 2020 and $1.6 billion in special charges coming later this year. But officials say the closures will help Ford become sustainably profitable in a region that has hemorrhaged money in recent years.

The automaker said production will cease immediately at Camacari and Taubate engine plants in Brazil, with some parts production continuing for a few months to support inventories for aftermarket sales. The company’s Troller plant in Horizonte, Brazil, will continue to operate until the fourth quarter, Ford said.

Ford will end sales of the EcoSport, Ka and Troller T4 in South America once inventories are sold. Ford said the moves will affect about 5,000 workers.

“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,” Ford CEO Jim Farley said in a statement. “We are moving to a lean, asset-light business model by ceasing production in Brazil and serving customers with some of the best and most exciting vehicles in our global portfolio. We will also accelerate bringing our customers the benefits of connectivity, electrification and autonomous technologies to efficiently address the need for cleaner and safer vehicles well into the future.”

Despite the closures, Ford will retain a presence in South America.

In Brazil, it will continue to offer sales, service, aftermarket parts and warranty support. Ford will also maintain its product development center in Bahia, its proving ground in Tatui, Sao Paulo, and its regional headquarters in Sao Paulo.

Elsewhere, Ford said manufacturing operations in Argentina and Uruguay, and the sales companies in other South America markets, are not affected by Monday’s announcement. It will continue to offer vehicles such as the Ranger, Transit, Bronco and Mustang Mach 1 as well as “several new connected and electrified vehicles,” it said.

The moves are part of an $11 billion global restructuring announced in 2018 under Hackett. His successor, Jim Farley, has re-committed Ford to goals of 8 percent global margins.
The closures — along with an announcement last year that it would close another plant in Sau Paulo, Brazil — leave Ford with two assembly plants in South America.
“I want to emphasize that we are committed to the region for the long-term and will continue to offer customers full sales, service and warranty support,” Lyle Watters, president of Ford South America and the International Markets Group, said in a statement. “This is especially true as we bring to market a robust lineup of exciting connected and electrified SUVs, pickups and commercial vehicles from within and outside of the region.”

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Saurabh Shukla

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