Brazil’s President Jair Bolsonaro lamented on Tuesday the loss of 5,000 jobs in the country after Ford’s announcement to suspend car manufacturing in the country and said the U.S. company hid part of the truth as what it wanted was more subsidies.
“I regret the 5,000 jobs lost,” the president said to his followers in front of the gate of the presidential residence, La Alvorada, adding that “Ford did not tell the truth. They want subsidies. Do you want them to continue to be given 20 billion reais (some 3,703.7 million dollars), as has been done in recent years? It’s your money, your taxes.”
Ford announced on Monday that this year it will close its three production plants in the South American giant as part of a restructuring of its operations in Latin America, which will cost some 4.1 billion dollars and will cause the loss of some 5,000 direct jobs.
After a century of operations in Brazil, the manufacturer attributed its departure from the country to the industry’s “persistent idle capacity and declining sales, resulting in years of significant losses,” compounded by the coronavirus pandemic.
For Bolsonaro, however, the closure of Ford’s plants is due to competition.
“They wanted to renew a subsidy to make cars and sell them. Now there is also competition, China, among others. (Ford) came out because in a business environment when you do not have profit, things close,” he said.
Faced with the departure of the American company, the Ministry of Economy defended the “rapid” implementation of structural reforms to achieve a better business environment and reduce production costs in the country.
The government’s pronouncement was reinforced by the Federation of Industries of the State of Sao Paulo (Fiesp), the most influential employer association in Brazil, and by the National Confederation of Industries (CNI), after warning that the decision serves as an “alert” for the country.
Like the Ministry of Economy, both Fiesp and CNI warned of the need to undertake reforms, mainly in the tax area, in order to reduce the so-called “cost Brazil” and thus improve Brazilian business environment.
The so-called “cost Brazil” is a sort 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 is to carry out any economic activity in the country.