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Ford has reached a preliminary agreement with Brazilian carmaker CAOA to buy Ford Motor Company's plant in Sao Bernardo do Campo, but the workers' union at the plant said it could cut 1300 jobs, Reuters reported.

In fact, as early as February this year, Ford announced that it would close its 52-year-old San Bernardo Dukamp plant in Brazil as part of its plan to restructure and withdraw from medium-sized trucks, which mainly produces heavy trucks. and the lagging compact Ford Fiesta, which employs about 3000 people.

CAOA and Ford have been negotiating the acquisition since the end of February, and Sao Paulo Governor Joao Doria is based on finding a buyer for the plant to save jobs in the city, according to Reuters. Wagner Santana, president of Ford's Brazilian factory union, said that in negotiations with CAOA, the Brazilian carmaker said it planned to keep only about 800 employees at the original plant, another 1300 would be laid off and the rest would be retained by Ford.

Jose Dolia, governor of the Brazilian state of Sao Paulo, said that the final number of jobs to be retained would not be decided until Ford and CAOA completed the deal. The transaction will go through 45 days of due diligence.

It is understood that Ford has lost money for 21 consecutive quarters in the South American market. From 2017 to 2018, sales of Ford cars and light truck trucks in Brazil increased by 10%. In 2018, Ford's pre-tax profit in South America fell sharply, losing 678 million US dollars.

In addition to selling the plant, Ford's Brazilian subsidiary said in April that it was launching a voluntary layoff program aimed at cutting extra staff at its Camacari plant in the northeastern Brazilian state of Bahia.

It is understood that CAOA plans to pay employees 80 per cent of Ford's current salary, which is still much higher than in other states. A spokesman for CAOA declined to comment. Carlos Alberto Olivera Andrader, president and founder of CAOA, said: "our goal is to make the factory profitable and productive, thereby creating jobs and wealth.

Brazil's huge domestic market and protectionist economy have long attracted the world's largest carmakers to set up factories here, and CAOA is one of the few big domestic carmakers. The company has reached an agreement to produce cars for South Korea's Hyundai and to run a joint venture with Chery.

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