Ford will end manufacturing in Brazil and expects $ 4.1 billion in charges

Ford Motor ends vehicle production in Brazil with a restructuring of its South American operations. The actions, including the closure of three plants, are expected to result in a previous recharge of $ 4.1 billion, Ford said Monday.

The automaker said it will record about $ 2.5 billion in cash charges, mostly in 2021, for employee separation, layoffs, liquidation and other payments. In addition, it will release about $ 1.6 billion in non-cash amortization to be collected for taxes and accelerated depreciation and amortization.

Ford has been operating in Brazil for more than 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 tries to execute a $ 11 billion investment plan. Ford expects to increase profitability by achieving an adjusted EBIT margin of 8% and generate a consistently strong adjusted free cash flow.

Production will immediately cease at its Camacari and Taubate plants in Brazil, however, some parts production will continue for a few months to support subsequent sales inventories, Ford said. Another plant in Horizonte, Brazil, will continue to operate until the fourth quarter. About 5,000 employees are expected to be affected.

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