Assembly line of engines for the Ford KA 1.0 3 cylinders at the Ford Engines plant in Camaçari, Brazil.
Paulo Fridman | Corbis News | Getty Images
Ford Motor is ending car production in Brazil following a restructuring of its South American operations. The actions, including the closing of three plants, are expected to result in $ 4.1 billion in pre-tax costs, Ford said Monday.
The automaker said it will incur about $ 2.5 billion in out-of-pocket costs, primarily in 2021, for employee separation, dismissal, settlement and other payments. In addition, it will record approximately $ 1.6 billion in non-cash depreciation for tax assets and accelerated depreciation and amortization.
Ford has been active in Brazil for over a century, but the region and operations have been unstable in recent years.
Ford is actively evaluating and restructuring its global operations, including those in South America, as it seeks to execute an $ 11 billion turnaround plan. Ford hopes to increase profitability by achieving an adjusted EBIT margin of 8% and generating consistently strong Adjusted Free Cash Flow.
Production at the Camacari and Taubate factories in Brazil will cease immediately, but production of some parts will continue for a few more months to support aftermarket stocks, Ford said. Another plant in Horizonte, Brazil, will remain in operation until the fourth quarter. It is expected to affect approximately 5,000 employees.
This is a breaking news story. Please check again for updates.