Ford's Venezuela unit offers buyouts as output dwindles - report

By Graeme Roberts | 6 December 2018

Ford is offering buy-outs to staff at its moribund plant in Venezuela to reduce its payroll, two union leaders told a news agency, as the automaker seeks to streamline its money-losing South America operations.

Ford's unit in Valencia, which has not received any orders for 2019, is offering the equivalent of US$150 for each year worked to all 915 employees at the plant, the unidentified union leaders told Reuters.

Ford would not confirm the report to the news agency and emphasised instead operations would continue in Venezuela which is suffering under a hyperinflationary economic collapse.

"Ford works diligently to adapt to the local conditions and continue serving customers with products and services," Ford told Reuters in a statement on Wednesday.

"Ford has been operating in Venezuela for 56 years and has no plans to leave the country."

In the past two months, 93 Explorer and Fiesta vehicles were assembled at the plant, the statement said.

The union officials said total production this year had been about 220 vehicles, less than half 2017's output, due to a lack of orders and the difficulty of buying parts.

The plant used to produce as many as 17,000 cars annually before Venezuela's economy entered a now five-year recession, with 2018 inflation expected to top 1m percent.

Ford this year started restructuring underperforming operations in Latin America, Europe and China as part of a strategy to fund investments in autonomous and electric vehicles, Reuters noted.

Chief financial officer Bob Shanks said in July the automaker's South American operations had not earned an appropriate return on investment since 2004 and the company was focused on a "significant redesign" in the region.

General Motors left Venezuela in 2017. A handful of multinationals have remained by slashing production and limiting product variety, but shrinking demand could lead many of them to exit in 2019, Reuters said.