{"id":108110,"date":"2021-01-11T23:42:19","date_gmt":"2021-01-11T23:42:19","guid":{"rendered":"https:\/\/precoinnews.com\/?p=108110"},"modified":"2021-01-11T23:42:19","modified_gmt":"2021-01-11T23:42:19","slug":"ford-to-close-brazil-manufacturing-operations-take-4-1-billion-in-charges","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/ford-to-close-brazil-manufacturing-operations-take-4-1-billion-in-charges\/","title":{"rendered":"Ford to close Brazil manufacturing operations, take $4.1 billion in charges"},"content":{"rendered":"
DETROIT\/SAO PAULO (Reuters) – Ford Motor Co said 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 amplified the company\u2019s under use of its manufacturing capacity.<\/p> Production will cease immediately at Ford\u2019s plants in Cama\u00e7ari and Taubat\u00e9, 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.<\/p>\n Ford officials said the action was part of the $11 billion global restructuring previously forecast by the U.S. automaker, of which it had accounted for $4.2 billion through the third quarter of 2020. Ford shares closed up more than 3%.<\/p>\n The plant closures affect about 5,000 employees, mostly in Brazil, Ford spokesman T.R. Reid said on a conference call with reporters.<\/p>\n Industry vehicle sales fell 26% in Brazil last year and are not expected to rebound to 2019 levels until 2023 with an emphasis on less profitable fleet sales, Ford said.<\/p>\n \u201cWe know these are very difficult, but necessary, actions to create a healthy and sustainable business,\u201d Ford Chief Executive Jim Farley said in a statement. \u201cWe are moving to a lean, asset-light business model by ceasing production in Brazil.\u201d<\/p>\n Ford officials said the plant closures are part of the company\u2019s strategy to achieve 8% global operating margins. Ford, which has operated in Brazil for more than a century, has begun discussions with its unions and others about the layoffs.<\/p>\n In Cama\u00e7ari, in northeastern Brazil, the union called an emergency meeting at the factory gates at the first shift on Tuesday to take a stance on the loss of 4,059 jobs.<\/p>\n \u201cThis very hard blow took us by surprise. We never imagined that Ford could close its factories in Brazil,\u201d said union leader Julio Bonfim in a video message to the workers.<\/p>\n The closures marked another retreat by Ford in a developing market after the Dearborn, Michigan-based company last month called off its auto joint venture with India\u2019s Mahindra and Mahindra Ltd.<\/p>\n As a result of the plant closures, Ford will end sales in South America of EcoSport SUV, Ka subcompact car and T4 SUV once inventories are sold.<\/p>\n Ford retains a plant in Argentina and another in Uruguay.<\/p>\n Ford said it will maintain its product development center in Bahia, its proving ground in Tatu\u00ed, S\u00e3o Paulo, and its regional headquarters in S\u00e3o Paulo.<\/p>\n Of the $4.1 billion in charges, Ford said it expects to record about $2.5 billion in the fourth quarter of 2020 and about $1.6 billion in 2021. The charges include about $1.6 billion in noncash charges and the rest in cash, primarily in 2021 to cover the layoffs.<\/p>\n