Last month, Ford made the somewhat shocking announcement that it would end production in Brazil, a country it has been operating in for over a century. That decision means that employees at the automaker’s Camaçari, Horizonte Troller, and Ford Taubaté Engine Plant are either already looking for new jobs or will be by the end of the year. However, two Brazilian judges have banned mass Ford layoffs in the country after issuing two injunctions this past week.
The ban on mass Ford layoffs will remain in place until the automaker negotiates a successful resolution with Brazilian trade unions, which it pledged to do at the time of its original announcement. However, Ford can be fined up to 100,000 reais ($18,626 USD) per affected employee if it chooses to lay off workers en masse, though the automaker can also appeal the ban.
Production at the Camaçari and Taubaté plants has already stopped, save for the manufacture of necessary parts for a few months to ensure availability of after-sales units. The Troller plant in Horizonte will continue to operate until the fourth quarter of 2021. As a result, Ford will end sales of the Ford EcoSport, Ka, and Troller T4 as soon as inventories are exhausted. Manufacturing operations in Argentina and Uruguay and sales organizations in other South American markets will not be impacted.
Both Ford CEO Jim Farley and Lyle Watters, President of Ford South America and International Markets Group, cited the automaker’s financial losses in the country as the driving reason behind its decision, along with an unfavorable economic environment and the additional pressure caused by the pandemic.
Brazil President Jair Bolsonaro has publically criticized Ford’s decision to end production in the country, alleging that the automaker was seeking to obtain tax breaks and other subsidiaries prior to the move. Meanwhile, Ford recently invested $1 billion in its South African manufacturing operations, a move that will create 1,200 new jobs.
We’ll have more on Ford’s exit from Brazilian manufacturing very soon, so be sure and subscribe to Ford Authority for the latest Ford business news and around-the-clock Ford news coverage.
Comments
W/o question, as a stockholder, it is time to divest all mfg in that country. The audacity of their courts is beyond belief. Damn’d if I’d pay one cent to their country. This is nothing more than posturing.
You don’t get it. It’s not posturing.
Brazil gave Ford substantial tax breaks and other financial incentives to produce vehicles there. Now Ford will need to pay it back before it can shut things down… which is a dumb decision on ford’s part. Also, there are laws about laying people off in masse in Brazil… like there are in most parts of the world. The US is behind the curve on this one.
Admit it, you’re just mad because your Ford stock will always be worthless or close to it. Pulling out of Brazil won’t save the sinking ship that is Ford today. The whole company rides on one product, the F-150. Everything else is worthless. They can’t save themselves no matter how many billions they pump into EVs.
It’s still not worth keeping open. When no one is buying cars there, why build any there. It’s worth the $18k hit even if it’s a joke. The tax breaks didn’t cover the losses. It will help the stock for sure. There’s a lot more cleaning that needs to be done instead of donating to a waste of a country. Great people, horrible leadership, just like America now.
If the production of vehicles for Ford in Brazil was not paying off, much of it is her fault! While the competition was investing in new global models, bigger, safer and technological, Ford stood still seeing its sales decrease every year.
And competition was only increasing its share of sales.
Hyundai, for example, started producing in Brazil in 2012 and quickly took the position that was occupied by Ford. Toyota and Renault made investments in new models and were already threatening their position.
With regard to the fine imposed by justice, it is totally correct.
Before and during the pandemic, Ford made agreements with the unions to reduce costs and studies for the development of new projects. In return, it would secure jobs by the end of 2021.
And what did she do? It simply announced the closure of its operations without any prior notice.
Regarding your speech about Brazil, this is prejudice! You should pay more attention to your own country instead of talking about others.
You don’t live there, to know what really happens.
Indeed, Ford’s situation is far from good in many countries.
In India, he had announced an agreement to sell part of his operations to Mahindra, but early in 2021, he gave up and did not explain why and what his plans were.
In China, there was an agreement with Zotye, but it also gave up and did not explain the reason.
Simply said …………… Move all production north of the canal zone. Unions are the most corrupt organizations know to mankind.