Ford Motors has suspended financial aid to its Argentine subsidiary because of the Peronist Government's failure to solve the country's deepening economic crisis.
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Background: Ford Motors has suspended financial aid to its Argentine subsidiary because of the Peronist Government's failure to solve the country's deepening economic crisis.
Company officials announced the move in Buenos Aires on Wednesday (13 August) and the company's executive board are considering shotting the Argentine plants for 30 days on stopping capital re-investment.
The officials said Ford needed to sell at least 2,000 vehicles a month to break even, but sales have slumped alarmingly in the past few weeks because soaring labour and component costs have forced up prices, putting cars beyond the means of the middle classes.
Other foreign based automobile companies have started laying off workers, and Argentine government officials are worried that it could be the start of many multi-national companies moving to more stable countries.
The news of the possible temporary shutdown of Argentina's third biggest automobile company came just as President Peron was swearing in Senor Antonio Cafiero as the country's fifth Economics Minister of four months.