But in terms of spare capacity, the most important indicator of factory profitability, the historic Sao Bernardo do Campo plant, which still employs 3,000 workers, had become a dwarf. Closed more often than it was open, the plantâ€™s production lines sprang to life just three days a week.
Ford announced on Tuesday it will close the factory and exit its heavy commercial truck business in South America as part of a global restructuring.
Overall, Fordâ€™s Sao Bernardo plant produced 33,000 cars and heavy trucks in 2018, or just 11 vehicles per employee.
An industry rule of thumb says an auto factory struggles to turn a profit unless it uses at least 80 percent of its capacity. In 2018, Ford used 12 percent of its car production capacity at the Sao Bernardo plant. In Brazil as a whole, Ford used 58 percent of its total production capacity last year, leaning heavily on a plant in the northeastern state of Bahia, where it receives significant tax incentives.
Productivity troubles in Brazil are perhaps most severe at Ford but plague the industry as a whole, even as Latin Americaâ€™s largest economy rebounds from its deepest recession ever with double-digit growth in car sales.
General Motors Co, now Brazilâ€™s sales market leader, produced cars equivalent to 78 percent of its capacity in 2018, up from 56 percent two years earlier, according to Reuters calculations based on capacity figures GM disclosed and production figures from local industry association Anfavea.
Still, GM executives warned workers earlier this year that the company was experiencing â€śa critical momentâ€ť in the country amid heavy losses.
Another top domestic producer, Fiat Chrysler Automobiles NV, produced cars equivalent to just 47 percent of its overall capacity, up from 36 percent in 2016, according to a similar calculation.
Fordâ€™s heavy truck business, which will be discontinued in South America, operated at 19 percent capacity, according to Fordâ€™s own figures. The company said it could find â€śno viable path to profitabilityâ€ť for the unit.
â€śWe know Brazil has excess capacity,â€ť said Leticia Costa, a Brazilian consultant and auto industry expert. â€śThis is a global problem for the auto industry but itâ€™s particularly true for emerging markets.â€ť
BOOM DAYS IN BRAZIL
Braziliansâ€™ mushrooming disposable income, along with hefty import barriers, encouraged automakers – led by Volkswagen AG – to set up shop there and produce cars locally starting in the late 1950s. That turned Sao Pauloâ€™s industrial suburb of Sao Bernardo into the epicenter of what for a time was one of the worldâ€™s top five auto producers.
Volkswagen, whose Beetle was the marketâ€™s sales leader in the industryâ€™s early boom days, did not respond to a request for comment on its capacity.
But some plants can now build cars more efficiently. Fordâ€™s second plant in Bahia produces six times more cars than the Sao Bernardo plant, with 53 percent more workers, according to the companyâ€™s website.
â€śFixed costs at that scale are sky-high,â€ť said David Wong, a management consultant and Brazilian auto industry expert.