The Brazilian Ministry of Economy on Monday regretted the decision of the vehicle manufacturer Ford to close its factories to the South American giant and called for the “rapid” implementation of structural reforms to achieve a better environment of business in the country.
In a statement, the portfolio also said it was “working hard” to reduce the so-called cost of Brazil, as well as in initiatives that “have already promoted significant progress.”
“This reinforces the need for rapid implementation of measures to improve the business environment and make progress on structural reforms,” he stressed.
The ministry, however, considered Ford’s “global and strategic” decision to close its three production plants in Brazil “out of tune” with the “strong recovery” experienced by the Brazilian industrial sector in recent months.
“The decision of the assembler is out of tune with the strong recovery observed in most sectors of the industry in the country, many already recording results above the pre-crisis period,” the note noted.
For his part, Brazil’s vice president, Hamilton Mourao, considered Ford’s departure “not good news” and said he was surprised by the company’s announcement.
“I think Ford has made a lot of money here in Brazil. I’m surprised by that decision,” he told reporters in Brasilia.
Mourao further assessed that the manufacturer could “have delayed a little more” the decision to close its production plants in the South American country, as the Brazilian market “is larger than that of other” countries.
This Monday, Ford announced that it will close its three production plants in the South American giant in 2021 as part of a restructuring of its operations in Latin America, which will cost it $ 4.1 billion and could destroy about 5,000 direct jobs.
In a statement, the manufacturer attributed its departure from Brazil, after more than a century of operations, to the “persistent idle capacity of the industry and the reduction in sales, resulting in years of significant losses”, increased by the covid-19 pandemic.
Ford’s announcement quickly affected major Brazilian sectors and led to the Federation of Industries of the State of Sao Paulo (FIESP), Brazil’s most influential employer, and the National Confederation of Industries (CNI). to warn that the decision serves as an “alert” for the country.
Like the Ministry of Economy, both the FIESP and the CNI warned about the need to undertake reforms, mainly tax, in order to reduce the so-called “Brazil cost” and thus improve the business environment. brazilian.
The so-called “Brazil cost” is a kind of informal indicator that measures the difficulty or effort required for the production and sale of products in the national territory and, the higher it is, the more difficult it will be to engage in economic activity in the country.
For its part, the National Association of Manufacturers of Motor Vehicles (Anfavea), the employer of the sector, regretted the decision and stressed that the departure of Ford “corroborates” the alerts made by the entity on the “idleness” local, global and the lack of measures to reduce the ‘Cost Brazil’ “. ?