By Brazil Stock Guide – Toyota Motor Corp. (TM:NYSE) may suspend car production in Brazil until at least the end of 2025 after a storm destroyed its engine factory in Porto Feliz, São Paulo state, according to the local metalworkers’ union. The information was first reported by Reuters.
Leandro Soares, head of the Sorocaba Metalworkers’ Union, compared the devastation to a total loss. “If we make a comparison with a car, the plant is a write-off,” he told Reuters after a meeting with Toyota. “It is very likely that Toyota will not resume production in Brazil this year due to the lack of engines in Porto Feliz.”
Severe structural damage
Winds of up to 90 kilometers per hour ripped off the roof and damaged columns and beams at the facility, which opened in 2014 following a 580 million reais investment. It was Toyota’s first engine factory in Latin America and one of its most advanced globally, with an annual capacity of more than 100,000 units.
“Practically the entire Porto Feliz factory was compromised,” Soares said, adding that the structure would have to be rebuilt: “They will have to remove what is left and put up a new skeleton.”
Labor measures and guarantees
To protect workers, Toyota is implementing collective vacations in Sorocaba and temporary hour banks in Porto Feliz, followed by collective leave. “Jobs are guaranteed,” Soares said, noting that negotiations for temporary layoffs (layoff) are underway to avoid dismissals.
The automaker employs about 3,800 people in Sorocaba and 800 in Porto Feliz. The company also confirmed it will honor this year’s wage agreement signed in September, before the storm.
Impact on production and launches
The disaster forced the indefinite postponement of the Yaris Cross launch, originally scheduled for Oct. 16. In Sorocaba, Toyota assembles the Corolla sedan, hybrid versions and the Yaris hatch for export, while Indaiatuba focuses on the Corolla sedan.
Toyota, which relies on a just-in-time supply chain, said production at Sorocaba and Porto Feliz plants has been suspended since Tuesday with no restart date. “A damage report is being prepared to understand the extent of the impacts… At this moment, we cannot forecast any date,” the company said in a statement.
Injuries and aftermath
About 30 workers were injured, most lightly, though one suffered a broken arm. Toyota confirmed “severe damage to the factory structure” and acknowledged that the destruction significantly disrupted its operations in Brazil.