Brazil Labor Courts Ban Automaker Ford from Mass Layoffs While Closing Plants

RIO DE JANEIRO, BRAZIL – Two Brazilian labor judges have banned U.S. carmaker Ford from mass layoffs as it closes its manufacturing facilities in the country.

The two injunctions were issued separately on Friday night, February 5th, according to Agencia Brasil news agency. The ban applies until negotiations with trade unions have ended, according to the report.

Labor court judges in Taubaté, São Paulo and Camaçari Bahia imposed fines of up to R$100,000 (about US$18,626) per employee for violations. Ford can appeal the ban.

The second-largest auto maker in the United States announced its decision in February to halt production in Brazil after decades of existence, the last of which were years of losses, and to close its remaining three plants there. According to the G1 news portal, thousands of employees have been affected.

Ford has had consecutive losses in recent years, which will lead to pre-tax write-downs of around US$4.1 billion, the company said in January. Chief executive Jim Farley said it was a “very difficult but necessary” decision.

Brazil’s Economic Ministry said it regretted Ford’s decision, which it said was at odds with the strong recovery seen in most of the country’s industrial sectors.

The plants in Camaçari and Taubaté are to be closed immediately, while production at the Troller subsidiary in the town of Horizonte in the state of Ceara is to continue for a few months.