SAO PAULO: Ford said Monday losses exacerbated by the coronavirus epidemic would see it close its three factories in Brazil, where it has operated for a century, terminating some 5,000 jobs.
Losses continued despite progress made in phasing out unprofitable products, which included exiting the heavy truck business, cutting costs and launching new products, a company statement said.
A "sustained unfavourable 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 Ford's South America head Lyle Watters.
The Covid-10 pandemic, said the company, "amplifies persistent industry idle capacity and slow sales that have resulted in years of significant losses."
Ford said production will cease at its Camacari and Taubate plants immediately, with only manufacturing of some parts continuing for a few months.
The Troller plant in Horizonte will operate until the fourth quarter.
Ford said it would end sales of EcoSport, Ka and T4 once inventories are sold.
"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 Jim Farley, Ford president and CEO.
By closing its Brazil factories, the company was moving to a "lean, asset-light business model," he added.
Ford would continue serving South America with cars sourced from Argentina, Uruguay, and other markets, it said.
New vehicle sales in Brazil retreated by more than 26 percent in 2020 due to the health crisis, the Fenabrave automotive federation said last week. Car sales dropped 28.57 percent and that of buses by 33 percent.
The closures will incur one-off charges of about $4.1 billion, said Ford.
