Ford Motor Company on Monday announced it would be shutting down three factories in Brazil as it plans on reorganizing its operations in South America this year.
The New York Times notes in its report that the company has long struggled in the region. The automobile manufacturer told the Times that the coronavirus pandemic had exacerbated “persistent industry idle capacity and slow sales that have resulted in years of significant losses.”
The company’s plants in Camaçari and Taubaté will be closed immediately, the Times reports, while the Horizonte factory will be closed at the end of the year. Despite this development, Ford vehicles will continue to be sold in Brazil. They will be imported from other countries such as Argentina and Uruguay.
“We know these are very difficult, but necessary, actions to create a healthy and sustainable business,” said Ford’s president and chief executive Jim Farley. “We are moving to a lean, asset-light business model by ceasing production in Brazil.”
As a result of the closures, Ford will record charges of $4.1 billion on its financial statements split between this year and last year.
This move will likely be to the detriment of Brazil, the Times note, whose economy is expected to contract by nearly 6 percent this year according to the International Monetary Fund.
Brazil is among the countries that have been hardest hit by the pandemic. According to data from the World Health Organization (WHO), Brazil has confirmed more than 8 million coronavirus cases and more than 202,000 deaths.