Ford Motor Co on Monday said that it would close three plants in Brazil and stop producing automobiles in the South American country, where it has been operating since 1919.
The company said in a statement that it would immediately cease production at the factories “as the COVID-19 pandemic amplifies persistent industry idle capacity and slow sales that have resulted in years of significant losses.”
Unions of two units that are to be closed said that about 4,800 workers between them are affected.
The automaker said that it would keep its South America headquarters, proving grounds and product development center in Brazil.
“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,” Ford president and CEO Jim Farley said. “We are moving to a lean, asset-light business model by ceasing production in Brazil and serving customers with some of the best and most exciting vehicles in our global portfolio.”
Ford’s decision is yet another blow to Brazil, whose economy has suffered since 2014, sinking further amid the pandemic. The country’s unemployment rate is nearing 15 percent, a figure that economists consider to be largely underestimated.
Ford also said that its Brazilian clients would have their needs met with vehicles sourced from plants in Argentina, Uruguay and other regions.
Ford’s decision caused a political stir in Brazil.
Brazilian House of Deputies President Rodrigo Maia wrote on Twitter that the closings are “a sign of the lack of credibility of the Brazilian government.”
Fabio Wajngarten, press secretary for Brazilian President Jair Bolsonaro, wrote on Twitter that Ford’s decision “has nothing to do with Brazil’s political, economic and legal situation.”
“Who says otherwise is lying and wants the spotlight,” he added.
Brazil’s National Association of Vehicle Manufacturers said that Ford ended last year as the fifth-highest selling company of the sector, with a market share of 7 percent.
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