Ford Motor Company announced January 11 that it would restructure its operations in South America by closing its three factories in Brazil and sourcing its vehicles sold in the continent from factories in Argentina and Uruguay.
Ford Brazil currently operates three production plants in Brazi: Camaçari, Taubaté, and Troller. All three will cease production in 2021. Production in the first two plants will close immediately, while the Troller plant will continue to operate until the fourth quarter of the year.
In a statement, Ford said the change was due to amplified persistent industry idle capacity due to the COVID-19 pandemic as well as slow sales over a period of several years.
Ford’s other Brazil operations, including its South American headquarters, its product development center, and proving grounds, will remain operational despite the change to production lines in the country.
In a statement, Jim Farley, CEO of Ford, said the plant closures would help move Ford towards a “lean, asset-light business model.”
“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,” said Farley.
Lyle Watters, President of Ford South America and the company’s International Markets Group, gave kudos to his team’s efforts to turn operations in the continent around by reducing costs, phasing out unprofitable products, and launching three Ford models.
“While these efforts improved results over the past four quarters, the sustained unfavorable economic environment and the additional burden of the pandemic made it clear that much more was necessary to create a sustainable and profitable future,” said Watters. He added that the company would work “earnestly” with unions and workers to help manage the impact of the production shutdown.