Ford Motor has announced that it will close three factories in Brazil and stop producing automobiles in the South American country.

The company said in a statement on Jan. 11 that it would immediately cease production at factories “as the COVID-19 pandemic amplifies the industry’s persistent inactive capacity and slows sales that have resulted in years of significant losses.”

The automaker also said it will keep its headquarters in South America, its product development center and testing grounds in Brazil.

“With over a century in South America and Brazil, we know these actions are very difficult, but necessary, to create a healthy and sustainable business,” said Jim Farley, President and CEO of Ford. “We are moving to a lean and light business model by ending production in Brazil and offering our customers some of the best and most attractive vehicles in our global portfolio.”

Ford’s move is another blow to Brazil, whose economy has suffered since 2014, sinking deeper amid the pandemic. The country’s unemployment rate is approaching 15%, a figure economists consider grossly underestimated.

Ford also said its Brazilian customers would see their needs met with cars sourced from Argentina, Uruguay and other regions.

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