Ford confirmed this Thursday (19) that it will stop production at its factories in South America. Although the company produces vehicles in Camaçari (BA), Taubaté (SP), at the Troller unit in Horizonte (CE) and in Pacheco, Argentina.
The measure comes into effect in Brazil on March 23 and in Argentina on the 25th. However, the aim is to limit the spread of the coronavirus.
“This additional action will help reduce the risk of spreading Covid-19, while enhancing the health of our business during this challenging period for the entire economy,” said Lyle Watters, president of Ford South America, in a statement.
Resumption of Activities
Therefore, Ford activities in Brazil should resume on April 13. In Argentina, the return is scheduled for April 6.
Other automakers have also announced collective vacations due to the effects of the coronavirus pandemic on the economy.
General Motors employees will be working from home between March 30 and April 12. However, in a statement, GM said that the goal is to adjust production to current market demand. The shutdown is valid for all five of the automaker's factories in the country. The Gravataí (RS) unit produces the Chevrolet Onix, the best-selling car in Brazil.
Mercedes-Benz will be on collective vacation between March 30 and April 19, in addition to using the time bank to give workers time off. The return is scheduled for April 22, but the return will depend on the situation in the country, according to the German manufacturer. The Ford company produces trucks and buses in São Bernardo do Campo (Greater São Paulo) and cars in Iracemápolis (inland SP).
There were also layoffs. Caoa Chery laid off around 50 workers from its Jacareí plant (in the interior of São Paulo). In a statement, the automaker said that “the economic situation in Brazil at the beginning of this year, aggravated by the recent surge in the dollar, has led to a large and unexpected drop in sales in the sector.”
“This measure aims to rebalance the company’s operations in the country and withstand the current economic scenario and the one expected for the coming months,” the company said. According to Anfavea (the association of automakers based in Brazil), negotiations on flexible working hours, production shutdowns and relations with unions have been conducted directly by the companies. There are 67 factories in 10 states, which employ around 125,000 workers.
The Coronavirus Crisis
The crisis caused by the coronavirus comes as brands launch new high-volume domestic cars. Among the most recent models are the 2021 Renault Duster, made in São José dos Pinhais, and the second generation of the Chevrolet Tracker, which is no longer imported from Mexico and is assembled in São Caetano do Sul (Greater São Paulo).
The pandemic has therefore reversed the expectations of manufacturers who were planning to close 2020 in the black after years of losses. Investments made by automakers since 2012, which exceed R$60 billion, have not yet been recovered.
After a first two months of numbers below expectations, March sales were going well. The accumulated total up to Tuesday (17) was close to 123 thousand registrations, with a daily average of over 10 thousand units. The industry believed in growth of close to 10% in the month compared to February.
Although a sharp drop is expected in the coming weeks, Fenabrave (the entity that represents vehicle distributors) will wait for the April result to review its forecasts for 2020. The biggest problem will be the loss of customers.
In short, according to the entity, the stocks available today cover a period of 45 to 60 days of sales, which would allow deliveries to be maintained next month even if factories extend their shutdown periods.
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