General Motors to stop production in Indonesia
General Motors Co. said Thursday it will stop producing vehicles in Indonesia because of high material costs and limited scale there.
The Detroit automaker will shutter its plant in Bekasi and cut 500 jobs by the end of June. The plant was originally opened in 1995 but closed between 2005-2013, when it reopened with a $150 million investment. It produces the Chevrolet Spin multi-purpose vehicle.
"We know this decision is disappointing for our hardworking employees in Indonesia," Tim Zimmerman, president of GM Southeast Asia operations, said in a statement. "We will work with our teams and the local community, along with the Indonesian government, to support our people."
GM said it will continue to sell vehicles, including the Chevy Aveo, Spin, Spin Activ, Orlando, Captiva, Colorado and Trailblazer, in Indonesia. Last year, it sold 10,758 vehicles there, down from 14,971 in 2013.
"GM Indonesia is undergoing a market-driven transformation," Stefan Jacoby, GM executive vice president and president, GM International, said in a statement. "This transformation will strengthen the business and dealer network by focusing on building the Chevrolet brand and delivering a competitive, high-quality portfolio to meet the needs of customers in Indonesia."
The automaker also said Michael Dune, president of GM Indonesia, will leave the company at the end of February to start his own business. GM Indonesia Chief Finanical Officer Pranav Bhatt will act as interim president until a permanent replacement is found.