The Brazilian Ministry of Economy on Monday regretted the decision of the Ford vehicle manufacturer to close its factories in the South American giant and called for the “rapid” implementation of structural reforms in order to achieve a better business environment in the country.
In a statement, the ministry also said it was “working hard” to reduce Brazil’s so-called cost, as well as in initiatives that “have already promoted significant progress.”
“This reinforces the need for rapid implementation of measures to improve the business environment and move forward with structural reforms,” he stressed.
However, the ministry said Ford’s “global and strategic” decision to close the three factories in Brazil was “out of step” with the “strong recovery” experienced by the Brazilian industrial sector in recent months.
“The assembler’s decision is not in line with the strong recovery seen in most industrial sectors in the country, with many already performing better than in the pre-crisis period,” the note said.
For his part, Brazil’s vice president, Hamilton Mourao, said Ford’s departure was “not good news” and said he was surprised by the company’s announcement.
“I think Ford made a lot of money here in Brazil. I’m surprised by that decision,” he told reporters in Brasilia.
Mourao also assessed that the producer could have “delayed the decision to close its factories in the South American country a little longer” because the Brazilian market “is larger than that of other” countries.
On Monday, Ford announced that it will close its three factories in the South American giant in 2021 as part of the restructuring of its operations in Latin America, which will cost $ 4.1 billion and could destroy about 5,000 direct jobs. . .
In a statement, the manufacturer attributed its departure from Brazil, after more than a century of operations, to the “persistent inactive capacity of the industry and reduced sales, resulting in years of significant losses”, increased by the covid pandemic19.
Ford’s announcement quickly had repercussions in Brazil’s main sectors and prompted the Sao Paulo Federation of Industries (Fiesp), Brazil’s most influential employers’ association, and the National Confederation of Industries (CNI) to warn that the decision serves as an “alert” for the country.
Like the Ministry of Economy, both Fiesp and CNI have warned of the need to undertake reforms, especially fiscal reforms, in order to reduce the so-called “cost of Brazil” and thus improve the Brazilian business environment.
The so-called “cost of Brazil” is a kind of informal indicator that measures the difficulty or effort required to produce and sell products in the country and, the higher it is, the more difficult it will be to conduct economic activity in the country.
For its part, the National Association of Car Manufacturers (Anfavea), the sector’s employers’ association, regretted the decision and stressed that Ford’s exit “corroborates” the entity’s warnings about “local, global laziness and the lack of measures to reduce” the cost of Brazil ””. ?