Ford Motor stated on Tuesday it will shut down its oldest factory in Brazil and exit its heavy commercial truck business in South America. This move is going to cost over 2,700 jobs as part of a restructuring supposed to end losses across the world.
Ford previously stated the global reorganization, to affect thousands of jobs and possible plant closures in Europe, would lead to $11 billion in charges.
After that announcement, experts and investors had expected a similar restructuring in South America. Ford CEO Jim Hackett stated last month that investors would not have to wait long for the South American reorganization plan.
The factory set to close, is located in Sao Bernardo do Campo, an industrial suburb of Sao Paulo that has been in operation since 1967. It first produced a number of auto models before being switched mainly to trucks in 2001. It constructs the F-4000 and F-350 trucks, along with the Fiesta small car, a sales laggard.
The factory closure may mean Ford is focusing again on the core of its car business in Latin America’s largest economy, based in a much recent factory in the northeastern state of Bahia. However the job cuts in Brazil’s industrial heartland show a psychological blow for the new administration of far-right President Jair Bolsonaro, which is combating an unemployment rate over 11 percent.
Ford’s recent cuts come as investors look for indications of progress on the company’s alliance with Volkswagen, which currently encompasses commercial vans and pickup trucks but may soon extend into electric and self-driving cars. The two automakers have also talked about working together on other projects, which could consist of combining capacity in regions like South America.