Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Ford Drops $1Bln Plant

SAO PAULO, Brazil -- In a decision highlighting how government overspending has hampered foreign investment in Brazil, Ford Motor Co. has abandoned plans to build an innovative $1 billion factory in a southern Brazilian state that refused to honor a pledge to provide the company with financial incentives because of a budget crisis.

Ford, which said it might search for another site for its factory, made the announcement in a statement Wednesday, after a month of negotiating with the government of Rio Grande do Sul, controlled by the national opposition Workers Party. Ford already assembles cars at other factories in Brazil.

Citing an annual budget shortfall of roughly 1.2 billion reais, or $723 million, Rio Grande do Sul officials reneged on an agreement between the state's previous administration and Ford, which would have provided the car manufacturer with about $250 million in financing and infrastructure to complete the factory by 2001.