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February 18, 2020

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GM pulling out of three countries

General Motors’ decision to pull out of Australia, New Zealand and Thailand as part of a strategy to exit markets not producing adequate returns on investments caused dismay from officials concerned about job losses.

Sunday, the company announced plans to wind down sales, engineering and design operations in 2021 for its historic Holden brand in Australia and New Zealand. GM also intends to sell its Rayong factory in Thailand to China’s Great Wall Motors and withdraw the Chevrolet brand from Thailand altogether by yearend.

“This is a very disappointing outcome,” said Karen Andrews, Australia’s minister for Industry, Science and Technology. “It’s unfortunate because about 500 workers will lose their jobs, and they only advised the government of this decision right before the announcement.”

Dave Smith of the Australian Manufacturing Workers’ Union also expressed chagrin.

“Workers at Holden thought they’d been through the worst of it, and that’s not the case,” Smith said. “GM’s long-term workers have been very loyal to the company, and they’ve loved being part of the car industry. It’s such an iconic brand coming to an end, and it’ll mean an end to their jobs.”

GM has 828 employees in Australia and New Zealand and another 1,500 in Thailand, the company said.

In Thailand, the decision to sell GM’s plant in Rayong, south of Bangkok, may turn out well for workers there.

Great Wall Motors, a major maker of sport utility vehicles and pickups, intends to expand in southeast Asia, using the plant in Thailand as its base.

“We will also promote the development of the local supply chain, research and development and related industries, plus contribute more to the tax base of both the local Rayong and national Thai governments,” said Liu Xiangshang, Great Wall’s vice president for global strategy.

Thailand is still determined to be the “Detroit of Asia,” said Krichanont Iyapunya, a spokesman for the Thai Ministry of Industry. He added that plant closures and openings happen constantly.

“The automobile industry must be adaptive,” Krichanont said.

Liu said the Thai expansion is part of the company’s global push, following the opening of a plant in Tula, Russia in 2019 and plans to acquire GM’s Talegaon plant in India.

GM has struggled in Asia in the past year. Its International Operations, which include China, lost US$200 million last year, including US$100 million in the fourth quarter.


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