UNITED STATES – American multinational corporation, General Motors Company has said it would wind down its Australian and New Zealand operations and sell a Thai plant in the latest restructuring of its global business.
The Thai plant, according to Reuters, will be acquired by Great Wall, one of China’s biggest sport-utility vehicle makers.
The moves which will cost the auto maker US$1.1 billion will accelerate GM’s retreat from unprofitable markets.
GM is “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 electric and autonomous vehicles, GM Chair and CEO Mary Barra said in a statement.
The decision to exist also comes after the company told analysts that restructuring international operations outside of China to produce profit margins in the mid-single digits would represent “a $2 billion improvement” on two years ago.
GM has forecast a flat profit for 2020 after a difficult 2019, and is facing ballooning interest in electric car rival Tesla Inc.
The latest changes are a continuation of GM’s retreat from Asia that began in 2015 when it announced it would stop making GM-branded cars in Indonesia.
The exits according to Reuters will lead to cash and non-cash charges of $1.1 billion and result in some 600 jobs being lost in Australia and New Zealand while some 1,500 jobs would be affected by the sale in Thailand.
Barra has prioritized profit margins over sales volume and global presence since taking over in 2014.
In 2017, she sold GM’s European Opel and Vauxhall businesses to Peugeot SA (PEUP.PA) and exited South Africa and other African markets. Since then, Barra has decided to pull GM out of Vietnam, Indonesia and India.
With sales of GM’s Australian Holden brand plummeting, the company could not justify the investment to continue building right-hand drive vehicles, GM President Mark Reuss said.
Amid continuous decline in new car sales, GM said it was ending Australian factory production in 2017 and last year called time on former best-seller the Commodore as part of a shift towards more compact SUVs and utility vehicles.