General Motors to Invest $1 Billion in Brazil Operations (Money to Come from U.S. Rescue Program)

Latin America Tribune ^ | 12.08.08 | Russ Dallen

[Dr. Marten]

General Motors to Invest $1 Billion in Brazil Operations -- Money to Come from U.S. Rescue Program

By Russ Dallen
Latin American Herald Tribune staff

General Motors plans to invest $1 billion in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market, said the beleaguered car maker.

According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the U.S. government and will be used to "complete the renovation of the line of products up to 2012."

"It wouldn't be logical to withdraw the investment from where we're growing, and our goal is to protect investments in emerging markets," he said in a statement published by the business daily Gazeta Mercantil.

Meanwhile, he cut the company's revenue forecast for this year by 14% to $9.5 billion from $11 billion, as the economic crisis began to cause rapid slowdowns in sales.

GM already announced three programs of paid leave, and Ardila added that GM Brazil "is going to wait and see how the market behaves in order to know what decision to take" with regard to possible layoffs.

For Ardila, the injection in Brazil's automobile sector of 8 billion reais ($3.51 billion) recently announced by the federal and state governments of Sao Paulo "has already begun to revive sales," which fell by 12% in October.

The executive said that the company will operate a "conservative" scenario in 2009 with an estimated production of 2.6 million units, and another more "optimistic" that contemplates sales of 2.9 million.

This year sales will reach 2.85 million vehicles, which represents a growth of 15% over last year.

[dennisw]

GM is an international company. It makes cars all over the world, and unlike its US operation, they are profitable. All of this bailout money is fungible. GM is an American company when it is convenient for them to be. I wonder what percentage of their American cars are actually made in the USA.

$25 billion dollar bailout for automobile makers is a mere pittance compared to trillions in bailouts for Wall St. Who were outright thieves which US automobile firms never were
Blame "credit default swaps" for our present predicament.
Not overpaid union workers and bad management

Last decade GM was our largest corporation and is a producer
Today #1 is Wal-Mart which is a consumer corporation. Wal Mart manufactures nothing

[Clemenza]

Who were outright thieves which US automobile firms never were

The automobile firms unfortunately seemed to hire the bottom 20% of whoever graduated Cowtown U to run their companies into the ground. I have ZERO symphathy. Yes, I know you once worked for the big three (as did someone VERY close to me), but I have to call them as I see them.

[kabar]

It is not about the amount of money but the princple involved. I didn’t support any bailout, including Wall Street. And a bailout will not solve the Big Three’s problems. They need to sell cars and be profitable.

[dennisw]

Move to Japan and you can drive Jap cars all day long with a clean conscience. Wall St got a bailout 100x larger than any car company

[Clemenza]

You should know by now that my Sonata was built right here in the U S of A.

BTW: This is only the beginning. Obama will practically nationalize the industry. The best thing that could happen is to see Bob Nardelli go bye-bye at Chrysler.

[wmfights]

From a business standpoint not a bad move. Get the money you can from us, expand your operations in mkts that have lower costs and a growing economy. How long until they only have a skeleton crew working here 10 yrs?

I'm sure the UAW and their govt flunkies just figured mgmt wouldn't respond to the coming nationalization of their businesses.

[Munz]

isnt this great?

[McGruff]

Do they expect us to go to Brazil and work?

I don't know. Are they less socialist than this country is getting? There be some hot Brazilian babes (not that I'm looking you know).