Collection of engines for the Ford KA 1.0 3-cylinder at the Ford Engines plant in Camaçari, Brazil.
Paulo Fridman | Corbis News | Getty Images
Ford Motor terminates production of vehicles in Brazil under restructuring of its South American operations. The actions, including the closure of three plants, are expected to tax $ 4.1 billion before taxes, Ford said Monday.
The carmaker has said it will record about $ 2.5 billion in cash costs, mainly in 2021, for layoffs, termination, settlement and other payments. In addition, it will place approximately $ 1.6 billion in non-cash write-offs for tax claims and accelerated write-offs.
Ford has been operating in Brazil for more than a century, but the region and operations have been unstable in recent years.
Ford is evaluating and restructuring its global operations, including those in South America, as it seeks to implement a $ 11 billion turnaround plan. Ford hopes to increase profitability by achieving an adjusted EBIT margin of 8% and continuously generating strong adjusted free cash flow.
Production will be stopped immediately at its Camacari and Taubate plants in Brazil. However, some parts production will continue for several months to support inventory sales, Ford said. Another plant in Horizonte, Brazil, will continue until the fourth quarter. About 5,000 employees are expected to be affected.
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