SAO PAULO, Brazil — Ford Motor Co mentioned on Tuesday it is going to shut its oldest manufacturing facility in Brazil and exit its heavy business truck enterprise in South America, a transfer that would value greater than 2,700 jobs as a part of a restructuring meant to finish losses all over the world.
Ford beforehand mentioned the worldwide reorganization, to affect 1000’s of jobs and potential plant closures in Europe, would lead to $11 billion in costs.
Following that announcement, analysts and traders had anticipated the same restructuring in South America. Ford Chief Government Jim Hackett mentioned final month that traders wouldn’t have to attend lengthy for the South American reorganization plan.
The manufacturing facility slated for closure is in Sao Bernardo do Campo, an industrial suburb of Sao Paulo that has operated since 1967. It first produced various auto fashions earlier than being switched predominantly to vans in 2001. It makes the F-4000 and F-350 vans, in addition to the Fiesta small automobile, a gross sales laggard.
The manufacturing facility closure could imply Ford is refocusing on the core of its automobile enterprise in Latin America’s largest financial system, primarily based in a a lot newer manufacturing facility within the northeastern state of Bahia. However the job cuts in Brazil’s industrial heartland symbolize a psychological blow for the brand new administration of far-right President Jair Bolsonaro, which is battling an unemployment price above 11 p.c.
“You’ll be able to’t value minimize your strategy to prosperity in the long run. We wish to hear in regards to the future, what you are doing for mobility companies and autonomous automobiles.”
Ford’s newest cuts come as traders look ahead to indicators of progress on the corporate’s alliance with Volkswagen AG, which already encompasses business vans and pickup vans however could quickly broaden into electrical and self-driving vehicles. The 2 automakers have additionally pledged to work collectively on different tasks, which may embody combining capability in areas like South America.
Ford shares closed up three.four p.c at $eight.83 in New York.
“You’ll be able to’t value minimize your strategy to prosperity in the long run,” mentioned David Kudla, who heads Michigan-based Mainstay Capital Administration, a agency that beforehand owned Ford inventory. “We wish to hear in regards to the future, what you are doing for mobility companies and autonomous automobiles.”
The closure can also be a blow to the economic outskirts of Sao Paulo, the place Brazil’s automotive business was born and which lengthy drove its industrial development. It is usually the place imprisoned former President Luiz Inacio Lula da Silva got here to fame as a union chief who organized huge strikes that helped harken the top of the army dictatorship.
The union in Sao Bernardo didn’t have a direct remark. However Sao Bernardo Mayor Orlando Morando complained angrily that Ford gave no warning and failed to debate the closure with the employees.
“The two,800 households immediately affected and one other 2,000 not directly affected deserved an opportunity to react. That is an act of cowardice,” Morando’s workplace mentioned in a press release.
A Ford spokesman declined to offer a exact determine for job cuts however acknowledged there can be “a big affect” and mentioned the automaker would work with unions and different affected events on “subsequent steps.”
Ford South America President Lyle Watters mentioned on Tuesday the automaker stays “dedicated” to South America, a area the place it’s not presently worthwhile.
Gross sales of Ford vehicles and lightweight vans grew by 10 p.c between 2017 and 2018 in Brazil, lagging a 15 p.c post-recession enhance for the business as an entire.
Within the vans enterprise, it ranked fourth, with gross sales lower than half these of Mercedes Benz and Volkswagen.
Ford mentioned in October it could cease constructing its Focus compact vehicles in Argentina in Could 2019 as a part of efforts to finish its losses within the area.
Kleiton Da Silva, an worker and union consultant in Ford’s surviving Bahia plant, mentioned the carmaker was in talks to chop 650 of its workforce there, which the automaker has mentioned totals four,604.
The No. 2 U.S. automaker expects to report pre-tax particular costs of about $460 million, with most of that recorded this yr, it mentioned within the assertion.