Ford to cease manufacturing in Brazil

In an announcement made by Ford Motor Company, the automotive manufacturer has advanced its restructuring in South America by ceasing its production operations in Brazil and instead, serving its customers electrified SUVs, pickups and commercial vehicles sourced from Argentina.

The company has also reported further plans to accelerate the introduction of multiple new connected and electrified models. Whilst its production will be ceasing in Brazil the company will maintain its full customer support operations in Brazil and South America, as well as its product development center in Bahia, its proving ground in Tatuí, and its regional headquarters in São Paulo.

“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. 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. We will also accelerate bringing our customers the benefits of connectivity, electrification and autonomous technologies to efficiently address the need for cleaner and safer vehicles well into the future,” commented Jim Farley, Ford president and CEO.

Ford has commented that it will immediately begin work with its unions and other stakeholders to develop an equitable and balanced plan to mitigate the impact of the production coming to an end.

“Our dedicated South America team made significant progress in turning around our operations, including phasing-out unprofitable products and exiting the heavy truck business. In addition to reducing costs across the business, we launched the Ranger Storm, Territory and Escape, and introduced innovative services for our customers. 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,” added Lyle Watters, president Ford South America and the International Markets Group.

Ceasing its production in Brazil comes as part of Ford’s evaluation of its operations around the world, making choices and allocating capital to advance its plans to achieve an 8% company adjusted EBIT margin, as well as generate consistently strong adjusted free cash flow.

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