American automaker Ford Motor Co has decided to shut down its production facilities in Camaçari and Taubaté, Brazil immediately as part of its South American restructuring initiative.
According to Ford’s media release, the move is part of its $11bn global restructuring plan to reach an 8pc EBITDA margin. Each of the two Brazilian plants has a capacity of producing 210,000 units. Ford also plans to shut the third Brazilian plant in Belo Horizonte, which produces the Troller model, by the fourth quarter of this year.
Demand for Ford’s cars in Brazil declined by 26pc in 2020 and the carmaker expects the recovery to take at least three years. However, it noted that the new cars to be launched in the country will be built in Argentina.
The company is already negotiating with local unions in Brazil and plans to spend about $2.5mn in employee settlements for about 5,000 affected workers from the plants.
In 2020, Ford’s global sales declined by 15.6pc to 2.04 million units, compared with 2.42 million cars in 2019.