After Halting Vehicle Production and Leaving the Country, Ford Shuts Down Another Operation in Brazil and Takes On Billion-Dollar Expense

The Multinational Automaker Ford Immediately Stopped Manufacturing Its Three Cars in Brazil: Ka, Ka Sedan, and EcoSport, to Import About 30,000 Cars Produced in Its Factories Abroad

Multinational Ford, which closed its factories in Brazil, announced on June 28 that its financial services arm, Ford Credit, will cease operations in Brazil and Argentina. With this decision, the company will assume a billion-dollar debt that could reach up to US$ 375 million (approximately R$ 1.85 billion at the current exchange rate).

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The U.S. multinational automaker said it expects that most of these losses, which include US$ 365 million (R$ 1.80 billion) related to foreign exchange, will be recognized in 2021, although the timing for the conclusion of the shutdown is uncertain.

Ford announced it would pay about US$ 10 million (R$ 49 million) in cash for employee layoffs. Additionally, in early June, news reports indicated that Ford would pay about R$ 2.5 billion to the state of Bahia after the decision to close its factories in Brazil.

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Ford Will Cease Parts Manufacturing in Brazil by December

Ford announced on January 11 that it would shut down operations at the two remaining factories in Brazil, catching the Brazilian market by surprise.

As a result, the multinational automaker immediately stopped producing its three national cars: Ka, Ka Sedan, and EcoSport, to exclusively offer imported vehicles in our market.

The trio was manufactured at the Camaçari (BA) unit, which will continue to operate until the end of November for the production of replacement parts.

The same applies to the Taubaté unit, responsible for producing engines and transmissions. At both factories, layoffs are already underway – last March, UOL Carros even published a video showing the destruction of approximately 900 unfinished Ka and EcoSport bodies following the decision to cease local manufacturing.

Troller Factory Will Be Sold and 470 Employees May Lose Their Jobs in Ceará

Ford also has the Troller factory in Horizonte (CE). The line will continue production of the 4×4 T4 utility vehicle until the end of this year, if the blue oval does not find a buyer before then.

Without factories in the country, the “new Ford” is also reducing its dealer network, which before January 11 had more than 280 authorized dealers and will drop to approximately 120.

Recently launched in Brazil, the Bronco Sport SUV is the first new model of this new phase.

Ford Motor Will Import Per Year, Through the Port of Vitória, About 30,000 Cars Produced in Its Factories Abroad

The Ford Motor Company will start importing vehicles through the Port of Vitória. Last week, 450 cars arrived in the state aboard the ship Torrens. The estimate is that approximately 30,000 cars will arrive in Brazil each year via Espírito Santo.

On May 18, the first vehicles from the American automaker arrived at the port of Vitória. Previously, Ford brought its cars through the Baixada Santista and Bahia.

Now, the Port Terminal of Vila Velha (ES) will be the only entry point for Ford in Brazil. According to Log-In Logística, the company responsible for the operation, the complex will receive around 28,000 to 30,000 cars from the American company annually.

The delivery was attended by Governor Renato Casagrande, who also toured the new vehicle storage and movement yard operated by LogIN TVV at the Port of Vitória.

In a Move Contrary to Ford, Volkswagen — the World’s Largest Automaker — Invests in Production and the SP Factory

In a move contrary to Ford, Pablo di Si, the CEO of Volkswagen in Latin America, announced in an interview with Reuters on the 7th that he is committed to launching a new cycle of investments in Brazil. According to the executive, the details of the investment will be announced at the end of the year by the Group’s Global CEO, Herbert Diess.

According to Pablo di Si, “we defined (the investment) and have already stopped production at our factory in Taubaté to prepare the new platform.” The executive did not provide details about the products, but it is known that one of them is the Polo Track, a new entry-level model for the brand in Brazil.

The Taubaté factory currently produces two compact cars, the Sedan Voyage and the hatchback Gol.

So far this year, Volkswagen has become the best-selling brand in Brazil, surpassing General Motors Co (GM.N) after many years, in part because GM’s production in Brazil has been halted more than Volkswagen’s due to a global chip shortage.