Ford's Venezuela unit offers buyouts as output dwindles: sources
CARACAS (Reuters) - Ford Motor Co (NYSE: F) is offering buy-outs to staff at its moribund plant in Venezuela to reduce its payroll, two union leaders said, as the U.S. automaker seeks to streamline its money-losing South America operations.
Ford's unit in Valencia, which has not received any orders for 2019, is offering the equivalent of $150 for each year worked to all 915 employees at the plant, the union leaders told Reuters, asking not to be identified because they were not authorized to talk to the media about the issue.
Ford would not confirm the report, and emphasized instead that operations would continue in Venezuela, which is suffering under a hyperinflationary economic collapse.
"Ford works diligently to adapt to the local conditions and continue serving customers with products and services," Ford said in a statement on Wednesday. "Ford has been operating in Venezuela for 56 years and has no plans to leave the country."
In the past two months, 93 Explorer and Fiesta vehicles were assembled at the plant, the statement said.
The union officials said total production this year has been about 220 vehicles, less than half 2017's output, due to a lack of orders and the difficulty of buying parts.
The plant used to produce as many as 17,000 cars annually before Venezuela's economy entered a now five-year recession, with 2018 inflation expected to top one million percent.
Ford this year started restructuring underperforming operations in Latin America, Europe and China as part of a strategy to fund investments in autonomous and electric vehicles.
Ford's chief financial officer, Bob Shanks, said in July that the automaker's South American operations had not earned an appropriate return on investment since 2004 and the company was focused on a "significant redesign" in the region.
Ford rival General Motors Co. (NYSE: GM) left Venezuela in 2017. A handful of multinationals have remained by slashing production and limiting product variety, but shrinking demand could lead many of them to exit in 2019.
(Reporting by Corina Pons in Caracas and Tibisay Romero in Valencia; Additional reporting by Ben Klayman in Detroit; Writing by Angus Berwick; Editing by Sonya Hepinstall)