DETROIT — Ford Credit said Monday it would cease operations in Brazil and Argentina by the end of 2021, a move that will cost the company $375 million, according to a filing with the Securities and Exchange Commission.
The special charge, a majority of which will be booked this year and come from foreign currency translation losses, is in addition to the $4.1 billion hit Ford Motor Co. said in January it would take to end production in Brazil as it focuses on more profitable markets.
“To enhance Ford’s new business model in South America, including improving competitiveness and best serving customers and dealers, Ford Credit has been assessing models under a variety of scenarios to provide optimal support. The transition of Ford dealer wholesale financing to preferred bank providers in Brazil and Argentina is a result of that assessment,” a Ford Credit spokeswoman said in a statement. “Retail customers are served already through preferred providers.”
The spokeswoman declined to say how many job losses would result, noting it was working to place employees with other Ford operations. Ford said in the filing $10 million would be paid in cash for employee separations.
Ford’s captive finance arm has been a bright spot financially in recent years. In the first quarter of 2021, the lender posted a $962 million profit, fueled by strong vehicle prices amid the semiconductor shortage and favorable comparisons to 2020.