The founder of Brazilian automaker CAOA said on Monday he is negotiating with Chinese business executives to make a joint acquisition of a Ford Motor Co plant near Sao Paulo.
Ford and CAOA have been in talks since March over the potential sale of the 11.8 million-square-foot plant in Sao Bernardo do Campo, slated to be shut down this year as the U.S. automaker exits its South American heavy truck business.
"We already met with Chinese (businessmen) that are interested in making cars with us," Carlos Alberto de Oliveira Andrade, whose initials spell CAOA, told reporters after a meeting with Brazil's finance minister in Brasilia.
Still, Andrade said that any investments could be held up if the legislature does not approve a difficult and sweeping pension reform, which economists say is crucial to balancing Brazil's federal budget and which has become the government's top priority.
A person with knowledge of the situation said CAOA was discussing a joint venture with a Chinese manufacturer that does not currently operate in Brazil.
"There were advanced meetings held at the Shanghai Auto Show," said the source, who could not speak for attribution because he was not allowed to discuss negotiations publicly.
While many global carmakers operate large factories in Brazil, CAOA is the rare automaker with local ownership. It currently makes cars for Chery, a Chinese automaker that already operates in Brazil via joint venture with CAOA. It also makes cars for Korea's Hyundai Motor Co. CAOA started as a distributor before expanding into manufacturing and is now Ford's largest dealer in Brazil.
Ford announced in February that it would close its plant in Sao Bernardo, which makes heavy trucks and the inexpensive sedan Fiesta, cutting nearly 3,000 jobs, as part of a global restructuring.
The news spurred Sao Paulo Governor Joao Doria to stage a campaign to find a buyer for the factory who might save some or all of the jobs.
Ford and the union representing Sao Bernardo's workers recently reached a deal on exit packages for those losing their jobs.