Ford to exit commercial heavy truck business in South America

Ford Motor CompanyFord confirmed that it will exit the commercial heavy truck business in South America.

Production will cease at the automaker’s Sao Bernardo do Campo factory in Brazil later this year as a result of the decision.

The US automaker will stop selling cargo vans, F-4000s and F-350s, and the subcompact Fiesta in the region after it sells out of its inventories. Cargo refers to the transportation of goods.

Lyle Watters, president of the firm’s South American business, said in a statement that 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.”

“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 added.

Ford spent months exploring viable alternatives, including possible partnerships and even a sale of the division before ultimately deciding to stop production. However, the company said that continuing in the region would require “significant capital investments to meet market needs and increasing regulatory costs with no viable path to profitability.”

The move is part of Ford’s $11 billion global restructuring effort to cut losses across different regions. Ford says that it expects to record pretax special charges of about $460 million as a result.

The decision follows a series of other initiatives that are part of Ford’s redesign of operations in the South American region, including:

  • Cutting salaried and administrative costs in the region by over 20% over the past few months. 
  • Bolstering its 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 Volkswagen to develop commercial vans and pickup trucks.