São Paulo-based Grupo CAOA has agreed to buy Ford Motor Co.'s São Bernardo do Campo plant, but the Brazilian carmaker could let go of 1,300 staff at the facility, Reuters reported Sept. 4, citing a news conference held in Brazil.
Financial terms of the deal were not disclosed but the transaction is expected to undergo a 45-day due diligence process, the report said.
CAOA, Ford's largest distributor in Brazil, started discussions to buy the U.S. carmaker's plant in February after Ford announced its intention to shutter the plant as part of its move to exit the heavy trucks business.
The Brazilian automaker approached Ford with the proposal after São Paulo state Governor Joao Doria rushed to find a buyer in a bid to keep jobs in the city, Reuters said.
It was earlier reported that CAOA was in talks with Chinese investors to help buy out the plant, but the latest report did not mention any Chinese investors involved in the deal.
Meanwhile, Wagner Santana, president of the union that represents Ford's workers, reportedly told a news conference that CAOA plans to retain only some 800 workers and lay off 1,300 people. The remainder of the plant's 3,000-strong workforce would be kept by Ford, according to the report.
During the news conference, Doria reportedly said a decision on how many jobs will be kept can only be made once the deal between Ford and CAOA is over.
In response to potential tax benefits from the state, Doria reportedly highlighted the need to preserve all jobs, saying it's the "fundamental condition for a contribution from the state."
CAOA plans to pay the employees it hires up to 80% of their current Ford salaries, the report said, citing Santana.
"The objective is to make the factory profitable and productive, so it generates employment and riches," CAOA's president and founder, Carlos Alberto Oliveira Andrade, reportedly said at the press conference.
CAOA could not be reached for comment, while Ford did not immediately respond to S&P Global Market Intelligence's request for comment.
