GM Accelerates Transformation of International Markets
GM Accelerates Transformation of International Markets
PR82911
DETROIT, Feb. 17, 2020 /PRNewswire=KYODO JBN/ --
-- GM to cease Holden sales, design and engineering operations by 2021,
plans to focus on growth opportunities in specialty vehicle business
-- GM and Great Wall Motors sign binding term sheet for sale of Thailand
manufacturing plant
-- Chevrolet to cease domestic sales in Thailand by end of 2020
General Motors (NYSE: GM) is taking decisive action to transform its international operations,
building on the comprehensive strategy it laid out in 2015 to strengthen its core business,
drive significant cost efficiencies and take action in markets that cannot earn an adequate return
for its shareholders.
GM announced today that it would wind down sales, design and engineering
operations in Australia and New Zealand and retire the Holden brand by 2021.
The company will focus its strategies for the market on the GM specialty vehicle
business. The company also announced that it had signed a binding term
sheet with Great Wall Motors to purchase GM's Rayong vehicle manufacturing
facility in Thailand; and would withdraw Chevrolet from the domestic market in
Thailand by the end of 2020.
"I've often said that we will do the right thing, even when it's hard, and this
is one of those times," said GM Chairman and CEO Mary Barra. "We are
restructuring our international operations, focusing on markets where we have
the right strategies to drive robust returns, and prioritizing global investments
that will drive growth in the future of mobility, especially in the areas of EVs and AVs.
"While these actions support our global strategy, we understand that they impact people
who have contributed so much to our company. We will support our people, our customers
and our partners, to ensure an orderly and respectful transition in the impacted markets."
GM President Mark Reuss said the company explored a range of options to continue
Holden operations, but none could overcome the challenges of the investments needed
for the highly fragmented right-hand-drive market, the economics to support growing
the brand, and delivering an appropriate return on investment.
"At the highest levels of our company we have the deepest respect for Holden's heritage
and contribution to our company and to the countries of Australia and New Zealand," said Reuss.
"After considering many possible options – and putting aside our personal desires
to accommodate the people and the market – we came to the conclusion that
we could not prioritize further investment over all other considerations we have in
a rapidly changing global industry.
"We do believe we have an opportunity to profitably grow the specialty vehicle
business and plan to work with our partner to do that," he concluded.
GM also undertook a detailed analysis of the business case for future production
at the Rayong manufacturing facility in Thailand. Low plant utilization and forecast
volumes have made continued GM production at the site unsustainable. Without domestic
manufacturing, Chevrolet is unable compete in Thailand's new-vehicle market.
GM Senior Vice President and President GM International Steve Kiefer said these
decisions built on the announcement in January that GM would sell its Talegaon
manufacturing facility in India; significant restructuring actions implemented in Korea;
and investment in and continued optimization of South American operations.
"These are difficult decisions, but they are necessary to support our goal to have
the GM International region on the pathway to growth and profitability," said Kiefer.
"GM is well positioned in our GM International core markets: South America, the
Middle East and Korea."
GM International Operations Senior Vice President Julian Blissett said that as
well as implementing plans in international core markets, GM was continuing to
optimize partnerships in markets like Uzbekistan, by transferring assets and
building strong supply chains to reduce costs in growth markets.
"In markets where we don't have significant scale, such as Japan, Russia and
Europe, we are pursuing a niche presence by selling profitable, high-end
imported vehicles – supported by a lean GM structure," said Blissett.
"We will continue to implement these critical business strategies, while
delivering a dignified and respectful transition in impacted markets."
In Australia, New Zealand, Thailand and related export markets, customers can
be assured that GM will honor all warranties and continue to provide servicing
and spare parts. Local operations will also continue to handle all recall and
any safety-related issues, working with the appropriate governmental agencies.
As a result of these actions in Australia, New Zealand and Thailand, the company expects
to incur net cash charges of approximately $300 million. The company expects to record
total cash and non-cash charges of $1.1 billion. These charges will primarily be incurred
in the first quarter and continuing through the fourth quarter of 2020. These charges will be
considered special for EBIT-adjusted, EPS diluted-adjusted and adjusted automotive free
cash flow purposes.
Cautionary Note on Forward-Looking Statements: This press release contains
forward-looking statements that represent our current judgment about possible
future events. In making these statements we rely on assumptions and analysis
based on our experience and perception of historical trends, current conditions
and expected future developments as well as other factors we consider appropriate
under the circumstances. We believe these judgments are reasonable, but these
statements are not guarantees of any events or financial results, and our actual results
may differ materially due to a variety of important factors, both positive and negative.
A list and description of these factors can be found in our Annual Report on Form 10-K
and our subsequent filings with the U.S. Securities and Exchange Commission.
We caution readers not to place undue reliance on forward-looking statements.
We undertake no obligation to update publicly or otherwise revise any forward-looking
statements, whether as a result of new information, future events or other factors that
affect the subject of these statements, except where we are expressly required to do so by law.
General Motors (NYSE: GM) is a global company committed to delivering safer,
better and more sustainable ways for people to get around. General Motors, its
subsidiaries and its joint venture entities sell vehicles under the Chevrolet
and Wuling (https://c212.net/c/link/?t=0&l=en&o=2721905-1&h=1603081180&u=http%3A%2F%2Fwww.sgmw.com.cn%2F%3Fevar25%3DGM_COM_Our_Brands&a=Wuling ) brands.
More information on the company and its subsidiaries, including OnStar, a global leader
in vehicle safety and security services, and Maven (https://c212.net/c/link/?t=0&l=en&o=2721905-1&h=1707642941&u=https%3A%2F%2Fwww.maven.com%2Fus%2F%3Fevar25%3DGM_COM_Our_Brands&a=Maven ), its personal mobility brand, can be found at http://www.gm.com.
SOURCE: General Motors Co.
CONTACT: U.S.: Pat Morrissey, GM Communications, +1 313-407-4548,
patrick.e.morrissey@gm.com; Australia: George Svigos, Director of
Communications, GM International Operations, +82 10-6352-7944,
george.svigos@gm.com
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