Ford ends decades of Brazil manufacturing

"With more than a century in South America and Brazil, we know these are very hard - but necessary - actions to create a healthy and sustainable business", declared chief executive officer and president Jim Farley.

The Troller plant in Horizonte, in the north-eastern state of Ceará, which makes off-road vehicles, is due to shut in the fourth quarter of 2021.

The big news is the closure of the Camaçari, Taubaté and Troller plants in Brazil.

As a result of this worrying news, the Blue Oval expects to record pre-tax special item charges of $4.1 billion split between $2.5 billion in 2020 and $1.6 billion in 2021.

The latest plant closings come after Ford shut a heavy-duty truck factory in Brazil in 2019, taking a US$460-million charge.

Carmaker 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.

"With more than a century in South America and Brazil, we know these are very hard, but necessary, actions to create a healthy and sustainable business".

The move is aimed at helping Ford achieve an eight percent pretax profit margin globally.

Two years ago, Ford detailed a plan to cut costs globally by £14bn, including "surplus labour" being curtailed throughout its global production network, but the pandemic is cited as a catalyst for the closures.

In addition to Europe, South America is a major problem area for the U.S. company, with an operating loss of 108 million dollars in the last quarter.

The company will cater to customers in the South America region with a portfolio of connected and increasingly electrified SUVs, pickups and commercial vehicles sourced from Argentina, Uruguay and other markets. "What we're doing will help us create a sustainably profitable business in that part of the world".

The automaker closed last year with a 7.1% market share, a rate that had been falling in recent years. The shares were were up three percent to US$9.27 at 3.24pm in NY.

Ford South America president Lyle Watters said that although there have been "improved results over the past four quarters", the "continued unfavourable economic environment" necessitated the measures.