Assembly line of engines for the Ford KA 1.0 3 cylinders at the Ford Engines plant in Camaçari, Brazil.
Paulo Fridman | Corbis News | Getty Images
Ford Motor is ending vehicle production in Brazil under a restructuring of its South American operations. The actions, including closing three plants, are expected to result in $4.1 billion in pretax charges, Ford said Monday.
The automaker said it will record about $2.5 billion in cash charges, primarily in 2021, for employee separation, termination, settlement and other payments. In addition, it will post about $1.6 billion in non-cash write-offs for tax receivables and accelerated depreciation and amortization.
Ford has operated in Brazil for more than a century, however, 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 attempts to execute an $11 billion turnaround plan. Ford is hoping to boost profitability by achieving an 8% adjusted EBIT margin and generate consistently strong adjusted free cash flow.
Production will cease immediately at its Camacari and Taubate plants in Brazil, however, some parts production will continue for a few months to support aftermarket 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 impacted.
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