Ford has confirmed its exit from the heavy commercial truck business in South America as a "key step toward returning its South America operations to sustainable profitability".

Ford said it remains committed to South America with a lean and agile business model, strengthened product offerings, and global partnerships.

Ford expects to record pre-tax special item charges of about US$460m as a result of the actions.

Production will cease at the São Bernardo do Campo plant in Brazil during 2019, ending sales of the Cargo lineup, F-4000 and F-350 – along with the Fiesta small car – once inventories are sold.

"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," said Lyle Watters, president, Ford of South America.

Ford said the decision to exit the heavy commercial trucks business came after months of pursuing viable alternatives, including possible partnerships and a sale of the operation. Ford maintains the business would have required significant capital investments to meet market needs and increasing regulatory costs with 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," Watters said. "Working closely with our dealers and suppliers, Ford will continue to provide support for our customers with warranty, parts and service."

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By GlobalData

This decision follows other recent initiatives in the on-going redesign of the South American region including:

  • Reducing salaried and administrative costs region-wide by more than 20 percent over the past few months
  • Strengthening portfolio withSUVs 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 VW to develop mid-size pickup trucks