Brazil’s government calls for more reforms after Ford’s departure from the country

The Brazilian Ministry of Economy regretted this Monday the decision of the vehicle manufacturer Ford to close its factories in the South American giant and called for the “rapid” implementation of structural reforms to achieve a better business environment in the country.

In a statement, the ministry also assured that it “works intensely” to reduce the so-called Brazil cost, as well as in initiatives that “have already promoted important advances.”

“This reinforces the need for a rapid implementation of measures to improve the business environment and to advance in structural reforms,” ​​he stressed.

The Ministry considered, however, that Ford’s “global and strategic” decision to close its three production plants in Brazil “is out of step” with the “strong recovery” experienced by the Brazilian industrial sector in recent months.

“The decision of the assembler is out of tune with the strong recovery observed in the majority of the industrial sectors in the country, many already registering results superior to the pre-crisis period,” the note said.

For his part, the vice president of Brazil, Hamilton Mourao, considered that Ford’s departure “is not good news” and said he was surprised by the company’s announcement.

“I think Ford has made a lot of money here in Brazil. I am surprised by that decision,” he told reporters in Brasilia.

Mourao also assessed that the manufacturer could “have delayed a little more” the decision to close its production plants in the South American country, since the Brazilian market “is larger than that of other” countries.

This Monday, Ford announced that it will close its three production plants in the South American giant in 2021 as part of a restructuring of its operations in Latin America, which will cost it $ 4.1 billion and could destroy some 5,000 direct jobs. .

In a statement, the manufacturer attributed its departure from Brazil, after more than a century of operations, to the “persistent idle capacity of the industry and the reduction in sales, resulting in years of significant losses”, increased by the pandemic of covid-19.

Ford’s announcement quickly had repercussions in the main Brazilian sectors and led the Federation of Industries of the State of Sao Paulo (Fiesp), the most influential employers’ association in Brazil, and the National Confederation of Industries (CNI) to warn that the decision serves of “alert” for the country.

Like the Ministry of Economy, both Fiesp and the CNI warned about the need to undertake reforms, mainly tax reforms, in order to reduce the so-called “Brazil cost” and thus improve the Brazilian business environment.

The so-called “Brazil cost” is a kind of informal indicator that measures the difficulty or effort required for the production and sale of products in the national territory and, the higher it is, the more difficult it will be to carry out an economic activity in the country.

For its part, the National Association of Motor Vehicle Manufacturers (Anfavea), the sector’s employer’s association, regretted the decision and stressed that Ford’s exit “corroborates” the alerts made by the entity about “local, global idleness and the lack of of measures that reduce the ‘Brazil Cost’ “. ?

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