Ford Motor affirmed closure of its oldest factory in Brazil and end its South America’s heavy commercial truck business. This move may cut down 2,700 jobs which was taken for restructuring the losses around the world.
Earlier Ford asserted to have a global reorganization, resulting in plant closures and impacting thousands of jobs in Europe. After the announcement, investors and analysts anticipated same restructuring in South America. Jim Hackett, Ford Chief Executive affirmed about similar reorganization plan for South America.
Sao Bernardo do Campo’s factory which was operated since 1967 used to produce auto models which switch to trucks in 2001. Now, it manufactures F-350 and F-4000 trucks, as well as the Fiesta sales laggard, small car.
The closure of the factory infer Ford is refocusing on its car business mostly in Latin America’s largest economy. But the job cuts in Brazil shows a psychological blow for the new government of far-right President Jair Bolsonaro, which is already suffering an unemployment rate approximately 11 percent.
These latest cuts done by Ford are watch for signs by investors that affirm Ford’s alliance with Volkswagen AG. Volkswagen already encompasses commercial pickup trucks and vans but planning for expansion into self-driving and electric cars. These giant automakers have pledged to work hand-in-hand for other projects which includes integrated capacity in regions like South America.
Ford shares closed up 3.4 percent at $8.83 in New York. "You can't cost cut your way to prosperity in the long term," said David Kudla, who heads Michigan-based Mainstay Capital Management, a firm that previously owned Ford stock. "We want to hear about the future, what you're doing for mobility services and autonomous vehicles."