US automaker Ford said it would close three of its plants in Brazil this year as the COVID-19 pandemic led to the company not using its full production capacity.
Production will be immediately discontinued at Ford’s Camacari and Taubate plants, with the production of some parts continuing for several months to maintain inventory for after-sales service. The Troller plant in Belo Horizonte will operate until the fourth quarter of 2021.
Ford officials said the move was part of an $ 11 billion global restructuring effort. The company’s shares rose more than 3%. The plant closure affected about 5,000 employees, mostly in Brazil, a Ford spokesman said during a conference call with reporters.
According to the company, car sales in Brazil fell by 26% last year and are not expected to return to 2019 until 2023.
“We know these are complicated but necessary actions to build a sustainable business,” Ford CEO Jim Farley said in a statement. “We are moving to a cost-effective business model focused on small assets by ending production in Brazil.”
Brazil’s Economy Ministry has expressed regret over Ford’s decision to stop production in the country and said it reinforces the need for reforms to improve the business climate.