Ford Venezuela Offers Buyouts With Production Set to Fall Further
(Bloomberg) -- Ford Motor Co. is offering buyouts to much of its remaining labor force in Venezuela as the automaker struggles to keep assembly lines running in the crisis-stricken nation, union officials said on Wednesday.
One of the only carmakers still producing vehicles in Venezuela, Ford began to offer severance packages this week to workers in its plant in Carabobo state, according to Gilberto Troya, a Ford employee and leader of the Sutra-Automotriz union. He said factory workers, team leaders and managers were offered buyouts starting around 70,000 bolivares per year worked, or roughly $150 at the black-market rate.
Many have already accepted the offer, he added.
The layoffs essentially represent a “closure of productive operations,” Troya said, as the Dearborn, Michigan-based company looks to further scale back production in a country plagued by hyperinflation and rampant shortages. Ford’s Venezuela operations have been severely buffeted by limited access to hard currency in recent years, which is essential for importing parts for production.
“The Venezuelan market has faced a significant decrease in demand over the last months and Ford works diligently to adapt to the local conditions,” Ford said in statement. It confirmed buyouts were taking place without providing details, and assured the company “has no plans to leave the country.”
Over the past two months, the Valencia factory produced a total of 93 Fiesta and Explorer models, Ford said. Venezuela’s chamber of auto parts manufacturers said the company produced some 7,000 vehicles in 2014.
The second-largest U.S. automaker is in the throes of a painful $11 billion restructuring as it copes with rising costs and slumping sales in markets overseas. While it has yet to detail its job cuts, Morgan Stanley predicts Ford may slash 25,000 jobs worldwide. Ford Chief Executive Officer Jim Hackett downplayed the report in a conversation with reporters yesterday.
Ford employs over 900 workers in Venezuela, but nearly 600 have been furloughed due to idled factory lines and a lack of inputs, Troya said. In 2015, the company began offering certain models in dollars in an attempt to restart its plant amid the country’s economic collapse.
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