Summary
Ford Motor Company has announced a significant strategic decision to exit manufacturing operations in Brazil. This move, approved in late December 2020, will result in the cessation of production at three key facilities: Taubate, Camaçari, and Troller. This exit is expected to have a substantial financial impact, with Ford anticipating pre-tax special item charges of approximately $4.1 billion. The charges are anticipated to be recognized roughly in two phases, with about $2.5 billion recorded in 2020 and the remaining $1.6 billion in 2021.
Key Highlights
- 1Ford is exiting its manufacturing operations in Brazil.
- 2Production will cease at three Brazilian facilities: Taubate, Camaçari, and Troller.
- 3The company expects to incur pre-tax special item charges totaling approximately $4.1 billion.
- 4Approximately $2.5 billion of the charges are expected to be recorded in 2020.
- 5Approximately $1.6 billion of the charges are expected to be recorded in 2021.
- 6The charges include a significant non-cash component ($1.6 billion) for tax receivables, depreciation, and amortization.
- 7The remaining cash charges ($2.5 billion) are primarily related to employee separation, termination, and settlements, expected to be paid mainly in 2021.