After more than a hundred years: Ford stops production in Brazil

Monday, January 11, 2021

After more than a hundred years
Ford stops production in Brazil

Ford has been making losses at locations outside the US home market for a long time. The vehicle manufacturer is now reacting and closing its plants in Brazil. A historic step, as Ford is considered the first major car manufacturer in the country. To this day, a city bears the name of the company founder.

The second largest US automaker Ford is cutting its troubled business in South America. The group announced the historic decision to stop production in Brazil after around 100 years of presence and, most recently, years of losses, and to close three plants there. This will lead to depreciation of around 4.1 billion dollars (3.4 billion euros) before taxes.

CEO Jim Farley said in a statement of a "very difficult but necessary" decision. According to a report by the Brazilian news portal "G1", hundreds of employees are affected by closings, some of which are immediate. The metalworkers' union called for a meeting at the Taubaté plant in São Paulo state on Monday evening (local time).

Ford has had difficulties internationally for a long time and recently only earned money in the US home market. In addition to Europe, South America is a major problem area for the US company, with an operating loss of $ 108 million in the past quarter. In Brazil, Ford sold 119,454 automobiles last year, according to data from the National Association of Automobile Manufacturers Anfavea, cited by "G1" – a decrease of 39.2 percent compared to 2019 and greater than that of the entire automotive sector in Brazil that year . Ford intends to keep its regional headquarters in São Paulo, and customer service and sales activities in South America's largest economy are to be retained.

Among other things, Ford was the first major car manufacturer in Brazil before Volkswagen and celebrated 100 years in the country in 2019. The city of Fordlândia in the state of Pará, named after the US car king Henry Ford, is still reminiscent of his attempt from the 1920s to become more independent of rubber deliveries from Asia and to set up plantations in the Amazon region. The company turned out to be a flop, and Ford withdrew again in 1945.