Ford Exits Commercial Heavy Truck Business In South America

Ford (F) has announced that it will stop production of its commercial heavy truck business in South America. The move is part of an effort to redesign its global business and will put an end to sales of the Cargo series F-4000 and F-350 trucks, as well as the Fiesta car.

The company said it will cease production at its São Bernardo do Campo plant in Brazil in 2019 and stop sales of the vehicles once all inventories are sold out.

For Ford, the decision to step away from the heavy commercial vehicle market in South America came “after months of pursuing viable alternatives, including possible partnerships and a sale of the operation.”

To compete in the South American market, Ford would have needed to make significant capital investments to meet growing regulatory costs and the needs of the market which it found “no viable path to profitability.”

“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, President, Ford of South America, said. “Working closely with our dealers and suppliers, Ford will continue to provide support for our customers with warranty, parts and service.”

Ford also cited further initiatives to realign its South American vehicle business by reducing salaried and administrative costs across the region by 20 percent. It said it would grow its portfolio of SUVs and pickup trucks while halting production of the Ford Focus in Argentina.

Ford has maintained that it is committed to South America as Watters said it will build “a sustainable and profitable business with strengthened product offerings, outstanding customer experience, and a leaner more agile business model.”

Shares of Ford stock were up 1.08 percent as of 3:01 p.m. EST on Wednesday.