Ford will stop selling heavy trucks in South America, a region where the automaker has long struggled.

The second largest U.S. automaker expects to record pretax special item charges of about $460 million as a result.

Ford will stop production at its Sao Bernardo do Campo plant in Brazil this year, and will stop selling the Cargo lineup, F-4000 and F-350 trucks along with the Fiesta compact car once it sells out of its inventories.

The automaker said it is still invested in the region, despite the pullback.</s>Ford will stop selling heavy trucks in South America, a region where the automaker has long struggled.

The second largest U.S. automaker expects to record pretax special item charges of about $460 million as a result.

Ford will stop production at its Sao Bernardo do Campo plant in Brazil this year, and will stop selling the Cargo lineup, F-4000 and F-350 trucks along with the Fiesta compact car once it sells out of its inventories.

This is a breaking news story. Please check back for updates.</s>DEARBORN (dpa-AFX) - Auto giant Ford plans to stop making heavy trucks in South America, a region where the automaker has long struggled. The company plans to stop production at an assembly plant in Brazil.



Ford will stop production at its Sao Bernardo do Campo plant in Brazil this year. It will also stop selling the Cargo lineup, F-4000 and F-350 trucks along with the Fiesta compact car once it sells out of its inventories.



Ford expects to record pretax special item charges of about $460 million as a result.



The company said the move is 'a key step toward returning its South America operations to sustainable profitability.'



Copyright RTT News/dpa-AFX</s>Ford Motor Co. plans this year to idle a plant in Brazil and exit the commercial heavy-truck business in South America as part of a global cost-cutting effort.

Ford CEO Jim Hackett and the executive team decided the commercial heavy-truck business would have cost too much money to maintain there with "no viable path to profitability," the automaker said Tuesday. The decision comes just more than a month after Ford announced plans to cut hourly and salaried positions in Europe, and possibly shutter plants there.

The automaker builds F-Series pickups, Cargo heavy trucks and the Ford Fiesta compact car at the Sao Bernardo Assembly Plant. The automaker is cutting sales of the Cargo lineup, which includes Transit vans; F-4000s; F-350s; and Fiesta cars in South America this year. It was unclear Tuesday if the Sao Bernardo plant would get new products in the future.

"Ford is committed to the South American region by building a sustainable and profitable business with strengthened product offerings, outstanding customer experience, and a leaner more agile business model," said Lyle Watters, president, Ford of South America. "We know this action will have a major impact on our employees in Sao Bernardo and we will be working closely with all our stakeholders on the next steps."

Ford plans to build its SUV and pickup portfolio in South America to boost profitability. The automaker is phasing out Focus production in Argentina as well. The automaker is taking similar steps in North America as it phases out sedans in favor of more SUVs and pickups.

The decision to exit the South American heavy commercial-truck business is expected to cost Ford $460 million, most of which goes to separation and termination payments for Ford employees, dealers and suppliers there. The charge is part of the $11 billion total Ford expects to incur as a result of its global restructuring.

Ford announced in January it would cut less-profitable vehicles from its European lineup, cut the workforce and possible close plants to right-side the money-losing business there. Ford has lost hundreds of millions in Europe and South America in recent years despite strong profits in North America.

Under Hackett's direction, Ford is cutting $25.5 billion in global operating costs, slashing the global salaried workforce, and taking an $11 billion charge in doing so.

Jim Farley, Ford president of global markets, said in January that restructuring plans for Europe and South America will differ from whatever Ford decides to do in North America.

"The situation of South American or Europe is quite different," he said. "Those businesses, we see a really healthy business within them. So restructuring will be a piece of that. Over the next months and weeks, you’re going to hear more."

The commercial vehicle business saved Europe, according to Steven Armstrong, group vice president and president for Europe, Middle East and Africa. South America's fate is different.

Though Ford's heavy commercial vehicles will flee the South American market, the automaker could still have a commercial presence there. Ford announced in January an agreement to partner with Volkswagen AG on commercial vans and pickups outside of North America. A Ford-VW co-developed pickup could launch in South America, though it's not expected before 2022.

The automaker has also cut "salaried and administrative costs region-wide" by 20 percent in South America, according to a news release.</s>fredrocko/iStock(SAO PAULO) — Ford is ending its sales of heavy trucks in South America in an effort to make its operations in the region profitable again.

The automaker announced on Tuesday production at its São Bernardo do Campo plant in Brazil will cease this year and sales of its Cargo lineup, F-4000 and F-350 trucks, as well as Fiesta compact cars, will end once inventories are sold.

“Ford is committed to the South American region by building a sustainable and profitable business with strengthened product offerings, outstanding customer experience, and a leaner more agile business model,” Ford of South America President Lyle Watters said in a statement.

The company said its decision to end its heavy commercial trucks business in the region came “after months of pursuing viable alternatives, including possible partnerships and a sale of the operation.”

“We know this action will have a major impact on our employees in São Bernardo and we will be working closely with all our stakeholders on the next steps,” Watters said.

Ford said it expects to record pre-tax special item charges of approximately $460 million. That figure includes about $100 million of non-cash charges for accelerated depreciation and amortization. The rest of the charges will be paid in cash and are mostly tied to separation and termination payments for employees, dealers and suppliers.</s>As part of a comprehensive redesign of its global business, Ford Motor Company today announced it will exit the commercial heavy truck business in South America. As a result, the company will cease production at the São Bernardo do Campo plant in Brazil during 2019, ending sales of the Cargo lineup, F-4000 and F-350 -- along with the Fiesta small car -- once inventories are sold.

“Ford is committed to the South American region by building a sustainable and profitable business with strengthened product offerings, outstanding customer experience, and a leaner more agile business model,” said Lyle Watters, president, Ford of South America.

The decision to exit the heavy commercial trucks business came after months of pursuing viable alternatives, including possible partnerships and a sale of the operation. The business would have required significant capital investments to meet market needs and increasing regulatory costs with no viable path to profitability.

“We know this action will have a major impact on our employees in São Bernardo and we will be working closely with all our stakeholders on the next steps,” Watters said. “Working closely with our dealers and suppliers, Ford will continue to provide support for our customers with warranty, parts and service.”

This decision follows other recent initiatives in the on-going redesign of the South American region including:
• Reducing salaried and administrative costs region-wide by more than 20 percent over the past few months
• Strengthening portfolio with SUVs and pickups that are growing in popularity with consumers while ceasing Focus production in Argentina
• Leveraging global partnerships, such as the recently announced alliance with VW to develop mid-size pickup trucks

In connection with this announcement, the company expects to record pre-tax special item charges of about $460 million. The charges will include approximately $100 million of non-cash charges for accelerated depreciation and amortization. The remaining charges of about $360 million will be paid in cash and are primarily attributable to separation and termination payments for employees, dealers, and suppliers. Most of these pre-tax special item charges and cash outflows will be recorded in 2019 and are part of the $11 billion in EBIT charges with cash-related effects of $7 billion the company expects to take in the redesign of its global business.

Ford Motor Company is a global company based in Dearborn, Michigan. The company designs, manufactures, markets and services a full line of Ford cars, trucks, SUVs, electrified vehicles and Lincoln luxury vehicles, provides financial services through Ford Motor Credit Company and is pursuing leadership positions in electrification, autonomous vehicles and mobility solutions. Ford employs approximately 199,000 people worldwide. For more information regarding Ford, its products and Ford Motor Credit Company, please visit www.corporate.ford.com.</s>Ford Motor Co. intends to stop making heavy trucks in Latin America and end production at an assembly plant in Brazil this year.

Ford is under pressure to improve overseas operations after incurring losses in each of its international business units in 2018. The auto maker's South America loss totaled $678 million last year.

The company said Tuesday the move is "a key step toward returning its South America operations to sustainable profitability."

The auto maker said it would book about $460 million in charges before taxes, and would end sales of the F-4000 and F-350 trucks once inventories are cleared.

Sales of the Fiesta small car will also end, Ford said.

Ford had said it was exploring alternatives for the São Bernardo do Campo assembly plant, including a possible sale, but Tuesday said the business "would have required significant capital investments to meet market needs and increasing regulatory costs with no viable path to profitability."

The plant opened in 1967 and employs more than 2,000 workers, according to the company's website.

Ford executives have said the company will remain in the region but will shift its focus to profitable parts of the business, including its midsize pickup truck, the Ranger, as well as its commercial-vehicle portfolio. Ford also has been cutting costs in South America, reducing the company's employee ranks by about 20% last year, Ford Global Markets President Jim Farley told analysts last month.

"We're going to play to our strengths in South America," Mr. Farley said.

Shares in Ford, which have gained 15% so far this year, were up 3% on Tuesday afternoon.</s>Sao Paulo/Detroit — Ford Motor Company said on Tuesday it will close its oldest factory in Brazil and exit its heavy commercial truck business in South America, a move that could cost more than 2,700 jobs as part of a restructuring meant to end losses around the world.

Ford previously said the global reorganisation, to impact thousands of jobs and possible plant closures in Europe, would result in $11bn in charges.

Following that announcement, analysts and investors had expected a similar restructuring in South America. Ford CEO Jim Hackett said in January that investors would not have to wait long for the South American reorganisation plan.

The factory slated for closure is in Sao Bernardo do Campo, an industrial suburb of Sao Paulo that has operated since 1967. It first produced a number of vehicles before being switched predominantly to trucks in 2001. It makes the F-4000 and F-350 trucks, as well as the Fiesta small car, a sales laggard.

The factory closure may mean Ford is refocusing on the core of its car business in Latin America­’s largest economy, based in a much newer factory in the northeastern state of Bahia. But the job cuts in Brazil’s industrial heartland represent a psychological blow for the new administration of President Jair Bolsonaro, which is battling an unemployment rate above 11%.

Ford’s latest cuts come as investors watch for signs of progress on the company’s alliance with Volkswagen, which already encompasses commercial vans and pickup trucks but may soon expand into electric and self-driving cars. The two companies have also pledged to work together on other projects, which could include combining capacity in regions such as South America.

Ford shares closed up 3.4% 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.”

The closure is also a blow to the industrial outskirts of Sao Paulo, where Brazil’s automotive industry was born and which long drove its industrial growth. It is also where imprisoned former president Luiz Inacio Lula da Silva came to fame as a union leader who organised huge strikes that helped end the military dictatorship.

The union in Sao Bernardo did not have an immediate comment. But Sao Bernardo mayor Orlando Morando complained angrily that Ford gave no warning and failed to discuss the closure with the workers.

“The 2,800 families directly affected and another 2,000 indirectly affected deserved a chance to react. This is an act of cowardice,” Morando’s office said.

A Ford spokesperson declined to provide a precise figure for job cuts but acknowledged there would be “a significant impact” and said the automaker would work with unions and other affected parties on next steps.

Ford South America president Lyle Watters said on Tuesday the company remains committed to South America, a region where it is not currently profitable.

Sales of Ford cars and light trucks grew 10% between 2017 and 2018 in Brazil, lagging a 15% post-recession increase for the industry as a whole.

In the trucks business, it ranked fourth, with sales less than half those of Mercedes Benz and Volkswagen.

Ford said in October it would stop building its Focus compact cars in Argentina in May 2019 as part of efforts to end its losses in the region.

Kleiton Da Silva, an employee and union representative in Ford’s surviving Bahia plant, said the carmaker was in talks to cut 650 of its workforce there, which the company has said totals 4,604.

The number two US carmaker expects to record pre-tax special charges of about $460m, with most of that recorded this year, it said .</s>Ford Motor Co. intends to stop making heavy trucks in South America and focus there on the more popular midsize pickup trucks and sport-utility vehicles, the company said Tuesday.

Michigan-based Ford is under pressure to improve its international operations after incurring losses at all of those units in 2018, including $678 million in South America.

On Tuesday, Ford said it would end production this year at Brazil's São Bernardo do Campo assembly plant, ending sales in South America of F-4000 and F-350 trucks once inventories are cleared.

Sales of the Fiesta small car in South America also will end, according to Ford. It previously said it plans to end U.S. sales of the Fiesta and Focus compact car, amid weaker demand for smaller vehicles.

Ford had said it was exploring alternatives for the São Bernardo do Campo plant, including a possible sale, but said Tuesday the business "would have required significant capital investments to meet market needs and increasing regulatory costs with no viable path to profitability."

It estimated it would book about $460 million in charges before taxes, with roughly $360 million going to workers, dealers and suppliers.

Ford didn't specify how many workers would lose their jobs as it ends production at the Brazilian plant. According to Ford's website, the plant, which opened in 1967, employs more than 2,000 workers.

The company plans to continue to do business in the region, but "we're going to play to our strengths in South America," Ford Global Markets President Jim Farley has said.

The auto maker, which is also winding down sales of the Focus in Argentina, has been cutting costs in South America, including reducing employee ranks by more than 20% over the past few months, the company said.

The South American market also has weighed on General Motors Co., which has said it is taking steps to improve results in the region. GM, based in Detroit, continues to be unprofitable in South America despite years of restructuring, and is in discussions with its unions, government officials and dealers on a turnaround effort, the company has said.

"The business climate there remains a challenge, particularly in Brazil and Argentina, our largest markets in the region," GM Chief Executive Mary Barra said during an investor presentation last month. "This is driving unacceptable losses that need to be addressed."

Shares in Ford closed at $8.83 on Tuesday, up 3.4% for the day and 15% so far this year, outperforming the market.</s>Ford previously said the reorganization would result in $11 billion in charges. The factory in Sao Bernardo do Campo, an industrial suburb of Sao Paulo, has operated since 1967 and was Ford's first plant in Brazil. Although it once produced a number of auto models, it now makes F-4000 and F-350 trucks, as well as the poor-selling Fiesta.

Ford said on Jan. 10 it would cut thousands of jobs and look at plant closures in Europe as part of its plan to return to profit in the region.

Following that announcement, analysts and investors had expected a similar restructuring in South America. Ford Chief Executive Jim Hackett said last month that investors would not have to wait long for the South American reorganization plan.

Ford shares were up 3 percent at $8.80 on the news in late afternoon in New York.

The closure of the factory may mean Ford is refocusing on the core of its car business in Latin America's largest economy, based in a much newer factory in the northeastern state of Bahia.

But the job cuts in Brazil's industrial heartland will represent a psychological blow for the still new administration of far-right president Jair Bolsonaro, who is battling an unemployment rate that is above 10 percent.

A representative for the union in Sao Bernardo did not have an immediate comment.

Brazilian Ford dealers' association head Luiz Albuquerque said the move eased a sense of uncertainty.

"For the car dealers, this gives us a sense of calm," said Albuquerque, "because Ford has been losing money in the region for the past four or five years and the closure of the truck business will almost completely erase that loss."

Albuquerque had met with the Ford leadership last week where they had guaranteed new investments in cars for the next three or four years.

Ford South America President Lyle Watters said on Tuesday the automaker remains "committed" to South America, a region where it is not currently profitable.

“We know this action will have a major impact on our employees in São Bernardo and we will be working closely with all our stakeholders on the next steps,” Watters said in a statement.

The No. 2 U.S. automaker expects to record pretax special charges of about $460 million, with most of that recorded this year, it said in the statement.

Ford said Tuesday's announcement follows other moves, including reducing salaried and administrative costs in the region by more than 20 percent over the past few months.
Ford Motor Company will stop selling commercial trucks in South America.