SINGAPORE, May 18, 2017 /PRNewswire/ --
- GM India to focus on export
manufacturing
- Isuzu Motors to purchase GM South Africa light commercial
vehicle manufacturing operations
- Chevrolet to be phased out of Indian and South African
markets
General Motors (NYSE: GM) today announced key restructuring
actions in its GM International operations to drive stronger
financial performance and focus its capital and resources on
business opportunities expected to deliver higher returns.
The company will focus its GM India manufacturing operations on
producing vehicles for export only and will transition GM South
Africa manufacturing to Isuzu Motors. GM's Chevrolet brand will be
phased out of both markets by the end of 2017.
"As the industry continues to change, we are transforming our
business, establishing GM as a more focused and disciplined
company," said GM Chairman and CEO Mary
Barra. "We are committed to deploying capital to higher
return initiatives that will enable us to lead in our core business
and in the future of personal mobility.
"Globally, we are now in the right markets to drive
profitability, strengthen our business performance and capitalize
on growth opportunities for the long term. We will continue to
optimize our operations market by market to further improve our
competitiveness and cost base."
These decisions were made following an extensive review of
operations in GM International markets and reflect a series of
actions taken to improve global business performance that began in
late 2013.
"These actions will further allow us to focus our resources on
winning in the markets where we have strong franchises and see
greater opportunity," said GM President Dan
Ammann. "We have compelling plans for growth in both the top
line and the bottom line as we invest for the future."
GM Executive Vice President and President, GM International,
Stefan Jacoby said the company is
running its GM International markets with an enterprise approach
and making decisions that are best for the global business.
"In India, our exports have tripled over the past year, and this
will remain our focus going forward," he said. "We determined that
the increased investment required for an extensive and flexible
product portfolio would not deliver a leadership position or
long-term profitability in the domestic market."
In South Africa, Isuzu will
acquire GM's light commercial vehicle manufacturing and GM will
cease manufacturing and sales of Chevrolet in the domestic market,
subject to local regulatory requirements.
"After a thorough assessment of our South African operations, we
believe it is best for Isuzu to integrate our light commercial
vehicle manufacturing operations into its African business," said
Jacoby. "We determined that continued or increased investment in
manufacturing in South Africa
would not provide GM the expected returns of other global
investment opportunities."
Under the improvement actions announced:
India: GM's
manufacturing facility at Talegaon will continue as an export hub
for Mexico and Central and South
American markets. GM will cease sales of Chevrolet vehicles in the
domestic market by the end of 2017. Existing Chevrolet customers
will continue to be supported in the market.
South Africa: Isuzu will
purchase GM's Struandale plant and GM's remaining 30 percent
shareholding in the Isuzu Truck South Africa joint venture, with
sales through a national dealer network. Isuzu will also purchase
GM's Vehicle Conversion and Distribution Centre and assume control
of the Parts Distribution Centre. The company will phase out the
Chevrolet brand in South Africa by
the end of 2017. GM continues to work with PSA Group to
evaluate future opportunity for the Opel brand in South Africa. Importantly, existing Chevrolet
and Opel customers will continue to be supported in the market.
East Africa: As
announced on February 28, Isuzu has
agreed to purchase GM's 57.7 percent shareholding in GM East
Africa, assuming management control. GM will withdraw sales of the
Chevrolet brand from the market.
Singapore: GM
International will streamline its regional headquarters office in
Singapore, which will retain
responsibility for strategic oversight of the remaining regional
business and markets, including Australia and New
Zealand, India, Korea and
Southeast Asia. This will deliver
greater organizational efficiencies while leveraging global
resources and in-market expertise.
Across affected markets, GM is working with employees, their
union representatives and local authorities to provide transition
support.
As a result of these actions, GM expects to realize annual
savings of approximately $100 million
and plans to take a charge of approximately $500 million in the second quarter of 2017. The
charge will be treated as special and excluded from the company's
EBIT-adjusted results. About $200
million of the special charge will be cash
expenses.
Forward Looking Statements: This document may include
forward-looking statements. These statements are based on current
expectations about possible future events and thus are inherently
uncertain. Our actual results may differ materially from
forward-looking statements due to a variety of factors, including:
(1) our ability to deliver new products, services and experiences
that attract new, and are desired by existing, customers and to
effectively compete in autonomous, ride-sharing and transportation
as a service; (2) sales of full-size pick-up trucks and SUVs, which
may be affected by increases in the price of oil; (3) the
volatility of global sales and operations; (4) aggressive
competition, including the impact of new market entrants; (5)
changes in, or the introduction of novel interpretations of, laws,
regulations or policies particularly those relating to free trade
agreements, tax rates and vehicle safety and any government actions
that may affect the production, licensing, distribution, pricing,
or selling of our products; (6) our joint ventures, which we cannot
operate solely for our benefit and over which we may have limited
control; (7) compliance with laws and regulations applicable to our
industry, including those regarding fuel economy and emissions; (8)
costs and risks associated with litigation and government
investigations; (9) compliance with the terms of the Deferred
Prosecution Agreement; (10) our ability to maintain quality control
over our vehicles and avoid recalls and the cost and effect on our
reputation and products; (11) the ability of suppliers to deliver
parts, systems and components without disruption and on schedule;
(12) our dependence on our manufacturing facilities; (13) our
ability to realize production efficiencies and cost reductions;
(14) our ability to successfully restructure operations in various
countries; (15) our ability to manage risks related to security
breaches and other disruptions to vehicles, information technology
networks and systems; (16) our ability to develop captive financing
capability through GM Financial; (17) significant increases in
pension expense or projected pension contributions; (18)
significant changes in the economic, political, and regulatory
environment, market conditions, and foreign currency exchange
rates; and (19) uncertainties associated with the consummation of
the sale of Opel/Vauxhall to the PSA Group, including satisfaction
of the closing conditions. A further list and description of these
risks, uncertainties and other factors can be found in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2016, and our subsequent filings
with the Securities and Exchange Commission. GM cautions readers
not to place undue reliance on forward-looking statements. GM
undertakes no obligation to update publicly or otherwise revise any
forward-looking statements.
General Motors Co. (NYSE: GM, TSX: GMM) and its partners
produce vehicles in 30 countries, and the company has leadership
positions in the world's largest and fastest-growing automotive
markets. GM, its subsidiaries and joint venture entities sell
vehicles under the Chevrolet, Cadillac, Baojun, Buick, GMC, Holden,
Jiefang, Opel, Vauxhall and Wuling brands. More information on the
company and its subsidiaries, including OnStar, a global leader in
vehicle safety, security and information services, can be found at
http://www.gm.com.