Ford Motor Co. (F - Get Report) unveiled the next step in its plan to become a leaner and more profitable company, announcing that its heavy truck business is exiting South America, a move that will result in a $460 million pretax charge.
Specifically, the company will cease production at its Sao Bernardo do Campo plant in Brazil this year, which will end sales of the Cargo lineup, F-400 and F-350 -- as well as the Fiesta small car -- once it sells of its inventory.
The charges include $100 million of non-cash charges for accelerated depreciation and amortization. The rest of the charges, which will be paid in cash, are attributable to severance payments for employees, dealers and suppliers.
"Ford is committed to the South American region by building a sustainable and profitable business with strengthened product offerings, outstanding customer experience, and a leaner more agile business model," said Lyle Watters, president, Ford of South America.
The move is part of the company's ongoing redesign of its operations in South America. Ford also recently reduced salaried and administrative costs region-wide by more than 20% while strengthening its portfolio of SUVs, the company's most profitable vehicles, while also ceasing production of its Focus sedan in Argentina.
Ford shares were up 2.4% in trading Tuesday.