GM ‘Likely’ to Build in China as U.S. Factories Close


By Stephanie Wong

April 20 (Bloomberg) -- General Motors Corp., shuttering U.S. plants in a bid to avoid bankruptcy, is “likely” to build a new factory in China on surging demand.

“Operations in China are profitable and in the future China can finance its own growth,” Nick Reilly, the company’s Asia-Pacific president, said at the Shanghai auto show today. He didn’t give a timeframe for the new plant.

GM, the biggest overseas automaker in China, boosted sales in the country 38 percent last month as government stimulus measures spurred demand for its minivans. By contrast, the company’s U.S. sales slumped 45 percent on the recession, as it battles to convince the U.S. government that it’s still viable.

The automaker has also delayed expansion of an Indian plant for as long as two years as sales growth there has slowed, Reilly said. The company will seek to turn around sales in Australia and South Korea, he added.

GM is basing its business planning in Asia on the assumption that it will have to finance projects locally, insulating it from possible problems in the U.S., Reilly said.

“We won’t get money out of the U.S. into China,” Reilly said. Still, “we don’t need to because we have a very good balance sheet.”

China Sales

The Detroit-based carmaker said April 9 it expects to double annual sales in China to more than 2 million vehicles over the next five years, with more than 30 new and upgraded models being introduced in that span.

GM makes vehicles in China through two ventures, both of which are backed by SAIC Motor Corp. Reilly said he wouldn’t comment on the possibility of Chinese automakers buying GM brands.

GM is trying to prove it’s viable in order to keep $13.4 billion in U.S. federal loans. The company is seeking to shed some brands, cut 47,000 jobs worldwide this year and close five assembly plants as it faces a June 1 deadline to avoid a U.S. government-backed bankruptcy.

GM will keep its “most profitable” Buick brand, Reilly said. The carmaker is trying to sell or close Saturn, Hummer and Saab out of its eight brands.

It’s also studying plans to drop Pontiac and GMC as part of its broader cost-cutting moves, people familiar with the discussions have said. The Chevrolet, Cadillac and Buick brands are likely safe, said the people last week, asking not to be named because decisions aren’t final.

GM is ready to cede controlling stakes in Adam Opel GmbH and Vauxhall Motors Holdings Ltd. in exchange for a promise to invest in a new venture formed from those European units, the Financial Times reported, citing two people familiar with the plans.

An investor will be asked to pay at least 500 million euros ($650 million) in equity for the units, while GM will inject the money directly into Opel, the newspaper said.

To contact the reporter on this story: Stephanie Wong in Shanghai at swong139@bloomberg.net
Last Updated: April 20, 2009 07:59 EDT



Ha ha.. Like I said, folks, this was never about the crisis in economics. This was to move the remaining production where it has a chance of surviving the coming socialist revolution in USA.

Ford had moved long time ago. With it's factories built and profitable in "new America", all it needs to do here is to quietly close the plants, so that the move isn't really seen as what it is, a move.

Hey, I understand them. If America can no longer guarantee the freedom to pursuit of happiness, may-be others would.

I have a lot of friends that retired from or now laid off from Arlington's GM

Are they union members?

not sure...i don't think so. danny (retired) is worried about his benefits and steve just got laid off

On another tread, folks were defending bailing out GM. It was stated, if GM went under, it would have an adverse affect on National Security. Now, they plan to go Communist and with our Tax money.

So much for BHO's promise to save jobs.

I had figured them to stay here, dump American workers and hiring on, with BHO's blessings, the Illegal Immigrants.

oh I heard an earfull at the bar thursday night about it

They can't use illegals in US. Obviously, this is illegal, for one. Secondly, the country is ready and prime for Nazism. This has happened before, it will happen again. People who think they "deserve" to be hired because they have "accomplished" being born here, while at the same time requesting to be paid way above their actual market value, can easily take it to "the gallows". There is no rationality in their views, why would there be a rationality in their actions?

And they are still defending that SOB.
Got their noses so far up his a$$, when BHO wants to go around a corner, he has to give 'em a hand signal.

Hey, I just realized what BHO means...

i'm ahead of you...i figured it out yesterday

DHS hasn't raided any company in the last two months. As far as it being Illegal to hire Illegals, that is past history.

I take that back. They raided a Co. in Wa. State but DHS was ordered to release them.

Everything is going to China. Hell, I have 2 friends of mine that are moving to China come June, they'll make killer money compared to here.

He never did say what country he was going to save or create 3 or 4 million jobs in. Should we chalk that one up to a campain promise kept?

May-be so.

But, if you were thinking of your own business, why would you want to build it somewhere you're "almost" likely to be punished for hiring a person who wants to work?

May-be DHS will raid you and may-be they will release your workers later. May-be is not a good base to plan a business on.

For a business to thrive, there must be a rule of law that supports freedom. In particular, your freedom to run your business.

That's seems to be correct! OMG, Hussein did not lie!

i will say this much...my friends have been with GM for a very long time and now this