GM exiting more international markets as it consolidates operations

Kalea Hall
The Detroit News

Detroit — General Motors Co. on Sunday announced new international operation changes to save money and help the automaker meet its costly electric and autonomous goals.

GM plans to wind down sales, design and engineering operations in Australia and New Zealand and retire its Holden brand by 2021 after years of declining market share. It also plans to sell its Rayong vehicle manufacturing facility in Thailand to Great Wall Motors and to withdraw Chevrolet from the domestic market in Thailand by the end of this year.

GM has suspended the quarterly cash dividend on its common stock and has stopped buying back shares.

The moves are part of GM's 2015 comprehensive strategy set to strengthen the Detroit automaker's core business, create cost savings and get out of markets that don't drive profit.

“I’ve often said that we will do the right thing, even when it’s hard, and this is one of those times,” GM Chairman and CEO Mary Barra said in a statement. “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."

GM has been aggressive with its electric vehicle plans with a goal of having 20 all-electric nameplates by 2023. It is investing $2.2 billion at its Detroit-Hamtramck Assembly plant to build the GMC Hummer EV, expected in late 2021, and an autonomous, electric shuttle called the Cruise Origin, which was developed by GM's autonomous vehicle unit Cruise LLC in partnership with Honda Motor Co.

GM is also investing $2.3 billion with LG Chem to build a battery cell manufacturing plant in Lordstown, Ohio. 

In 2017, GM stopped producing the Holden-branded vehicles in Australia, almost 70 years after the first Holden came off the assembly line there. Since then, the Holden vehicles have been manufactured throughout the world with about 50% coming from Thailand and a small number of units being manufactured at GM's Spring Hill Assembly plant in Tennessee.

GM President Mark Reuss, who formerly oversaw Holden operations, said the company explored a range of options to continue Holden operations, but those options couldn't help the company overcome the challenges with the brand including the economics to support growing it.

“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," he said in a statement.

At the Rayong manufacturing facility in Thailand, low plant-utilization and low forecast volumes have made continued GM production at the site unsustainable and without domestic manufacturing, Chevrolet is unable compete in Thailand’s new-vehicle market, GM said. Rayong produces the Chevrolet Colorado pickup truck and Trailblazer SUV and Holden vehicles.

As a result of the transformation announced Sunday, GM expects net cash charges of about $300 million and total cash and non-cash charges of $1.1 billion.

The Sunday announcement comes after GM said in January it would sell its Talegaon manufacturing facility in India to Great Wall Motors, which followed the sale of the GM Technical Center India to Tata Consultancy Services, completing GM's exit from India.

In other international moves, GM has also restructured operations in Korea and has continued to make investments in and optimize its South American operations.

In 2017, GM sold its Opel/Vauxhall and GM Financial’s European operations to PSA Group. In 2015, GM largely exited the Russia market.

GM said it is continuing to optimize partnerships in markets like Uzbekistan through transferring assets and building supply chains to reduce costs.

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