From the closed factory in Camaçari (BA), the empty yards and signs for the avenue that was named after Henry Ford, founder of the automaker, remained. From the employees, the union in groups of messaging applications that became a kind of space of mutual support for the loss of jobs remained.
The announcement of the closure of Ford’s production activities in Brazil, which completes one year on January 11, left a trail of unemployment, a drop in industrial production and a cascading effect on the economy of Camaçari. In early 2021, the company also announced the closure of the factories in Taubaté (SP) and Horizonte (CE), in addition to the Bahia unit.
Camaçari housed the first automobile industry in the Northeast after a long political and fiscal battle in the 1990s and became a development hub in the following years. The closure of activities worsened the already fragile scenario for the region’s economy, especially affecting the future of service providers who settled in place to serve the operation.
The closing of the factory impacted the city’s commerce and services sector, especially the education and real estate sectors. The city government estimates that, just in salaries of direct Ford employees and systemists, about R$ 20 million ceased to circulate monthly in the local economy.
Installed in a planned neighborhood that grew up around the factory, the construction material store owned by José Edmílson Oliveira, 49, had a 40% drop in revenue in 2021: “Ford added many companies. These people used to buy here”.
Private schools and colleges, for example, have lost students. The termination rate reached 50% in some courses. The impact was such that the city had to open a refinancing of tax debts of educational establishments.
“The salary mass was injected into the local economy. It was money that went to consumption, services and rentals of the properties where Ford employees lived. Part of that was lost”, says the Secretary of Government of Camaçari, Helder Almeida.
There was also a hit in the municipality’s collection – in municipal taxes alone, the loss was R$ 50 million per year. But the reduction in revenue will be even greater when the distribution of the municipal quota of ICMS (Imposto sobre Circulação de Mercadorias e Serviços), a tax collected by the state, is recalculated in 2023.
It is more difficult to measure, however, the impact on people’s lives. The thousands of laid-off employees took different paths. Some returned to their hometowns, others set up small businesses and there were even those who used the rescission money to buy a car and become an app driver.
Most have an uncertain future. Celso Ricardo Moreira, 43, for example, worked at Ford for 20 years. He started on the factory floor and worked his way up to quality inspector. After his dismissal, he opened a condominium management company, but he is still looking for his first clients.
“I decided to work on my own and I am running the company slowly. It is difficult to get a new job in the industry because there is no job market for so many people”, he says.
His colleague Iomário Silva, 26, is also taking the first steps in his solar energy panel installation company. The transition is not easy, he says. This month, the laid-off employees’ health plan, which has been extended for a year, will be suspended, and that causes him concern.
Between January and November 2021, the vehicle, trailer and bodywork sector closed 4,800 formal jobs in Bahia, according to data from the federal government’s Caged (General Register of Employed and Unemployed).
The balance measures the difference between layoffs and hires. Of the 4,800 vacancies lost, 4,600 were registered in Camaçari.
The impact on the local economy was not greater only because part of those laid off still remain in the city and remain with the money received on termination. This is the case of Charles Alencar, 49, who worked at the automaker since the beginning of operations, in the stamping sector, and has now been unemployed for a year.
Having difficulty re-entering the market because of his age, he also decided to open a business. But he preferred to wait for the pandemic crisis to subside. His colleague Edson Pereira, 52, is another jobless person: “Most people are anxious and worried about their families.”
Figures calculated by the IBGE (Brazilian Institute of Geography and Statistics) indicate that the Bahian industry was hit hard by the departure of the automaker.
From January to October 2021, the production of motor vehicles, trailers and bodies plummeted 94.6% in the northeastern state. Brazil had an increase of 28.2% in the same range.
With the impact in the automotive sector, industrial production in Bahia, in general terms, was pulled down: there was a drop of 13.1% until October.
It is the biggest retraction, by far, among the 15 places surveyed by the IBGE in the year. The second biggest drop in industrial production, 5.2%, was registered in Mato Grosso.
“The fall in Bahia is closely linked to the closing of Ford”, points out economist João Paulo Caetano, from SEI (Superintendence of Economic and Social Studies of Bahia), linked to the state government.
At the time of the announcement of the closing of the automaker, the agency projected that the end of operations in Camaçari could generate an annual blow of about R$ 5 billion for the Bahian economy, equivalent to 2% of GDP (Gross Domestic Product).
According to Caetano, the exact value of the losses can only be calculated from the disclosure of the 2021 GDP, which has not yet occurred.
State seeks interested
The state government says that, in 2021, Bahia lost about R$280 million in revenue with the closure of the automaker’s operations.
The calculation takes into account the direct ICMS and the payment to Fundese (Fund for Social and Economic Development).
To repair the impacts, the government tries to bring new investments to Camaçari. The state administration indicates that it is in negotiations with the automotive sector, but still avoids citing the names of companies that would be interested in filling the space left by Ford.
“All the government’s efforts are being made to attract another large industry to occupy Ford’s area in Camaçari, as this is the most direct and effective way to neutralize the effects of the company’s exit”, says the government.
The state also mentions that it was compensated in R$ 2.1 billion by Ford after the end of operations, resources that were added to the budget in 2021.
Superintendent of Fieb (Federation of Industries of the State of Bahia), Vladson Menezes considers that qualified labor can be a decoy for those interested in replacing the automaker. But that alone is not enough, he says.
Menezes understands that the state needs to seek advances in areas such as infrastructure, and tax incentives would serve to provide competitiveness for the installation of new businesses, according to him.
In addition, a less uncertain political and economic environment in Brazil is also important, which becomes more complicated in an election year, he says.
“The longer this process takes, the more difficult the situation will be, because systemist companies are no longer operating or because a part of the workers may be migrating to other sectors”, says Menezes.
Sought by the report, Ford did not give details about the impact on its operations caused by the closing of factories in Brazil. The company informed that “the Brazilian market is still one of the largest in Latin America and, therefore, extremely relevant for Ford”.
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