Ford’s South American Shake Up Includes Plant Closure, End Of Commercial Truck Business

Ford has announced restructuring plans for North America and Europe, and now the automaker is detailing changes for South America.

Despite being “committed” to the continent, Ford confirmed plans to cease production at its São Bernardo do Campo plant in Brazil later this year. Ford decided to close the plant as they’re exiting the heavy commercial truck business in South America. This means the automaker will stop selling the F-350, F-4000 and Cargo lineup there.

Trucks aren’t the only thing affected by the closure as the facility also builds the Fiesta. In another blow to South American car lovers, Ford reiterated they will cease production of the Focus in Argentina.

Similar to their North American plans, Ford said they will be strengthening their South American portfolio with “SUVs and pickups that are growing in popularity with consumers.” Speaking of the latter, Ford confirmed they will be “leveraging global partnerships, such as the recently announced alliance with VW to develop mid-size pickup trucks.”

The decision to close the São Bernardo do Campo plant will likely be met with fierce resistance, but Ford said they spent months looking for ways to save the plant and its 2,782 employees. The company says this included everything from exploring possible partnerships to selling the operation. However, these ideas were rejected as Ford determined the investments required would have resulted in “no viable path to profitability.”

In a statement, Ford’s president of South America said “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.” Lyle Watters went on to say “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.”

  • Mr. EP9

    Ouch.

  • Alexandro Pietro

    No cars ,no profits!

  • bryceee

    Great insight to Ford’s problems.

    • Ilbirs

      I say that the main problem of Ford do Brasil is Ford do Brasil, as this brand makes vehicles here since 1956, starting producing trucks and only 11 years later entering the passenger car business (the Galaxie was the first Brazilian product). It also got well when bought Willys-Overland local operations and put its hands on the Project M, something built on the same underpinnings of the Renault 12, but way better styled than its French counterpart.
      Ford started its wrongdoings here in the 1970s, when released the Maverick as a competitor to the Chevrolet Opala (an Opel Rekord C body powered by the same modular engine family of four and six-inline units used in U.S. by the Chevy II and the Nova). The problem is that the customer clinics pointed that the Brazilian preferred the Taunus TC. The result was a car released in 1973, discontinued in 1979 and outsold by the Opala in this period by a reason of 5 Opalas per Maverick. Here in Brazil we also never had the Sierra (Merkur XR4 for Americans) despite producing here one of the engines that fitted this model (the Lima family that powered Mustangs and Thunderbirds of the Eighties in a turbocharged form). In these times the Brazilian and Argentinian operations were managed as they were as distant geographically like Brazil or U.S. are from Australia. While here in Brazil we know that Pelé was a way better player than Diego Maradona, we must recognize that Argentinians were happier when driving a Ford, as they had the Sierra being produced there, while here we have the Del Rey, a model that was built on those same underpinnings of the Renault 12, but at that time being an obsolete base. At that times there was the Escort to support the problems and the Brazilian market was very closed, something that made my country to have its entire fleet made by just four brands: VW, Ford, Chevrolet and Fiat, all of them very accomodated to a point that we had five years without releasing a brand new model, something that was interrupted when Chevrolet released its own version of the Kadett C (the model that Americans called the Pontiac LeMans and in reality was made in South Korea as the Daewoo Nexia)

      Ford do Brasil also made some wrong decisions, such as the merger with VW called Autolatina, in which not only became more dependent on VW engines than VW was on Ford ones but also due to the nature of the business it made difficult for the Blue Oval to become again an independent firm. In these post-Autolatina years they made the right decision to build the Mk1 Ka and the Mk4 Fiesta but the wrong decision of not using the CHT powerplant (a version of the Renault Cléon engine with changes), opting on making here the Kent engine, way worse than the CHT in all aspects, and importing the 1.4 Zetec-Sigma, that reached the same horsepower level that a 1.6 CHT would have if equipped with a multipoint injection.
      It also made the good decision of bringing from Argentina the Mk5 Escort, powered by a Zetec that still make people nostalgic due to its great performance. After making the Kent, it replaced both this and the Zetec-Sigma with the Rocam family, that was also exported to Europe and are good engines overall. It also got very right when released the Mk5 Fiesta and shattered the ground when released the Mk1 EcoSport, in this last case running alone for years until Renault released the Duster. Other good shot was when it created the Brazilian Mk2 Ka, basically a Mk4 Fiesta with the same doors and A pillars of the Mk1 Ka. For sure this Brazilian Mk2 Ka was way better succeeded than the Euro Mk2 Ka, a reskinned Fiat 500.

      Ford also got right when built the Camaçari factory that started building the Mk5 Fiesta and the Mk1 Eco. It is a plant away from the strongest unions on the region we call the ABC (Santo André, São Bernardo do Campo and São Caetano do Sul, that are home to the main automakers and suppliers installed here in Brazil) and, due to this, away from some problems that these unions generated when became too strong (if an American knew how the unions here behave, would consider the UAW something very moderate and reasonable). Camaçari is in the state of Bahia and near the city of Salvador, with this Ford plant being the first one of a big automaker on the Northeastern region. It showed to the Brazilians that it’s very possible to create an auto plant on a place that wouldn’t be expected to make cars (Camaçari is strong on petrochemicals).
      The problem is that the São Bernardo unit, with an installed capacity of 400 thousand units/year, got more and more unimportant to Ford’s passenger car business here. It only built the Mk6 Fiesta in its final years, a car that was plagued by the PowerShift problems mentioned before, and the truck lineup comprised by the F-Series (in specs that made these products the oldest ones built by Ford in the world, corresponding to the American Super Duty made in the late-1990s) and the Cargo family, the smaller ones using the same cab of the original cargo and the bigger ones using the more recent project developed by Otosan with some changes (like using the Cummins engines, as Ford Trucks doesn’t make its own diesels like Otosan does).

      Ford do Brasil’s causes on axing the truck production can also be considered part of the historical mistakes on car production. F-Series and Cargo were produced on an unit on the neighborhood of Ipiranga, in the city of São Paulo and very near the São Bernardo do Campo plant. After the Autolatina split, Ford decided to transfer all this lineup to the the unit that now is being closed. If we look at what brands that builds both cars and trucks use to do when doing the right thing, one thing is to build cars in one plant and trucks in another one due to the nature of the businesses. But, as can be seen, the guys of Ford do Brasil opted to reserve part of a plant intended to build cars to make trucks, meaning that anything happening on car business would influence the truck production, despite the fact that Ford Trucks was holding very well its position on the marketing, even when considering the fact that it was depending on what Otosan does and the fact that a new cab for the smaller Cargos wasn’t considered.
      Yes, a very important operation for the Brazilian headquarters didn’t have the bigger development infrastructure needed for its relevance and relied too much in both being located on a plant designed to churn out passenger cars and at most adapting some projects coming from outside. Compare this to MAN Latin America’s operation, that continued the VW operations of designing product locally, the more recent being the current generation VW Delivery, that seems to be something made by someone that studied the smaller Cargos to a point that offered the same levels of roominess that are a highlight of the original design of Patrick Le Quément, but on a way more modern shape. For sure Ford do Brasil knows how to design a light truck cab and it’s also sure that JMC, one of the Chinese partners of the Blue Oval, would love to have this cab on its product as we see the Turkish Cargo project being made there with changes.

      The problem here are the consequences of bean counting and bad management being taken to a very extreme level. I’d also point a typical problem of American firms: instead of identifying a problem when it’s small and manageable and making some small route corrections, they prefer to act as this problem isn’t happening to a point that grows too much to pass unnoticed and at some point announcing drastic measures that inclusive harm businesses that weren’t affected by what isn’t going so well. Compare this to what we see being done on Euro and Asian automakers.

      • Marcin Lewandowski

        Beautiful study. It is said more on South American auto business here, than I found anywhere else in one peace. Thanks.

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