why other automakers abandoned Ford plants

why other automakers abandoned Ford plants

Automobile production leaves the scene to give way to real estate development. This is where at least two of the four factories that Ford were operating in Brazil were created.

Yesterday (18), the North American company announced the agreement for the sale of the Taubaté division (SP) to Construtora São José, which in 2020 had already acquired for R $ 550 million, together with FRAM Capital, land and buildings. of the former Ford headquarters in São Bernardo do Campo, in the Metropolitan Region of São Paulo.

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Decommissioned in 2019, the ABC Paulista plant will be transformed into a logistics center, while Taubaté, which closed its doors last year, should follow the same path. UOL cars spoke to experts to find out why no other automaker has bought the manufacturing facilities that Ford closed.

According to sources, the high idle capacity of Brazil’s already installed car factories, which today is around 50%, as well as the old and large size of many Ford production lines, scared off buyers – among the car industry.

It is worth noting that the Camaçari (BA) and Horizonte (CE) units, where the Troller T4 jeep was assembled, have not yet been sold. Like Taubaté, both ended their operations in 2021, after Ford announced the end of domestic car production to sell only imported models.

“The factories of São Bernardo do Campo and Taubaté were too big for the current size of the car market. It doesn’t make sense to keep the production line much lower than its capacity, because it costs money to stop and the account is useless. ‘t close”, analyzes Flavio Padovan, a partner at MRD Consulting and a former chief executive of automakers such as Ford, as well as Volkswagen and Jaguar Land Rover.

Padovan points out that the future buyer will have to spend a lot of money to update and repair the facilities in São Paulo and, therefore, resume the production of cars and car components in these units.

The consultant adds that Ford’s act of putting those factories up for sale after announcing that they will be closed has not helped to attract other car brands.

“Properties are sold while they are still in use. After that they begin to deteriorate and lose their value. In this way, the interest in industries has decreased greatly and thus led to the sale of the building sector”.

‘It is possible that many car factories will be closed’

Cassio Pagliarini, partner at Bright Consulting and former director of Renault and Hyundai, echoes his colleague about the wrong time.

“Ford factories were very large and today we have excess production capacity. At its peak, Brazil was able to produce 4.8 million units, including cars and light commercial vehicles. [por falta de demanda ou de componentes]this capacity is around 4.5 million, still higher than the 2.3 million produced now”, says Pagliarini.

According to him, “it is possible that many more factories will close or become uneconomic” due to this laziness.

Buildings in São Bernardo came in the areas of Caoa, which accepted official interest, but were ignored in early 2020.

Regarding the Camaçari unit, which is a more modern plant than the other three, once again the limitation will be its large dimensions. The Troller line will be very limited, and the aggravating factor is that Ford is refusing to sell the brand and the rights to make the T4 – only giving away the land and assets placed on it.

“It may seem that the car manufacturer is ready to buy the Camaçari plant, but the capacity to produce up to 250,000 cars per year is very limited,” reflects Flavio Padovan.

‘It will not be a purchase’

The Ford plant in Taubaté (SP) produced engines and transmissions and had about 830 direct employees.

Image: Disclosure

The founding partner of Construtora São José, Mauro Silvestri is waiting for the completion of the process of selling Ford’s land in Taubaté, which is subject to approval from CADE (Administrative Council of Economic Defense) and must be completed between 60 and 90 days.

The executive reveals that the company is still preparing what will be built instead of the factory, which occupies an area of ​​970,000 m².

“We will conduct a survey to find out the needs and calls of the region in the area of ​​equipment and also for other commercial businesses”, says Silvestri.

When asked, he denies that this commercial enterprise will be a supermarket.

“It will not be a store, there is already one near the land. Our intention is not to build a residential condominium either. As in São Bernardo, we are thinking of building a logistics center in Taubaté, going back to the origin of our company, and, if possible, a hospital or a small health clinic “, says the executive in an interview with UOL cars.

According to Mauro Silvestri, this hospital will be private and built according to “built to suit”, in which the property is made to order for rent, following the specifications and needs of the future tenant.

“Any decision will be taken only after the approval of the city hall, as we do in all the municipalities where we have business enterprises. This hospital would serve the future workers of the logistics center and also the population in general”, says the businessman.

According to him, the expectation is to generate about 2,500 jobs in Taubaté, including about 500 jobs during the construction phase.

Silvestri adds that Ford’s facilities in Vale do Paraíba currently have a built-up area of ​​130,000 m² – spread over two warehouse blocks “in good condition”, a total of 105,000 square meters, as well as three other blocks that, together, reach 25,000 m² – and in need of renovation.

If Taubaté’s transaction is confirmed, it will be the third property owned by Ford to be sold to Construtora São José, which more than ten years ago opened Mooca Plaza Shopping in the capital of São Paulo, on land where another North American factory. the automaker was found.

The logistics center at ABC should be ready by the end of 2025

Demolition of the Ford factory in São Bernardo;  only 10% of the original installation will be used - André Paixão/Primeira Marcha - André Paixão/Primeira Marcha

Demolition of the Ford factory in São Bernardo; Only 10% of the original installation will be used

Photo: André Paixão/March 1

Mauro Silvestri also says that the construction of another hospital in the land of São Bernardo do Campo is being analyzed, also in a “built to fit” design, but bigger. It is not yet clear which client will run the future hospitals, he explains.

Estimates are that the logistics center at ABC will provide 4,500 jobs, as well as another 500 jobs during operation in an area of ​​1 million m².

The general partner of PIB Incorporadora, São José’s partner in the São Bernardo do Campo project, Carlos Carbone informs that the work already has a construction permit issued by the city and should start in July.

“There will be six stages and the first is scheduled to be completed in mid-2023, with the start of the lease of the respective huts. The sixth stage is expected to end at the end of 2025”.

Carbone also informs that the construction will have an area of ​​480,000 m² and will use about 10% of the original sheds – the rest is in the final stage of demolition.

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