Ford to Construct Plant in South America

The Brazilian subsidiary of Ford Motor Co. said that it will spend as much as $1 billion on a new auto plant in the southern state of Rio Grande do Sul. Ford plans to initially invest $500 million and could invest up to another $500 million, depending on details to be worked out with Rio Grande do Sul’s state government. The final contract, in which the details will be spelled out, is expected to be signed within the next four months. According to a letter of intent, Ford plans annual production of 100,000 vehicles of a yet-to-be disclosed model by 2001. Between 70% and 75% of the new plant’s output would be sold in Brazil and the remainder would be exported to Argentina, Uruguay and Paraguay. Ford shares rose $1.19 to close at $46.81 on the NYSE.