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 .