General Motors to Use Bailout Billion to Invest in Brazil

[Sol Invictus]

GM to Use Bailout Billion to Invest in Brazil

Russ Dallen
Latin American Herald Tribune
February 1, 2009

SAO PAULO — 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.

[Treffie]

This is unbelievable - a slap in the face for all US workers and tax payers.

Geez, who's money were they given anyway?

[SwordoftheVistula]

My current and 2 prior vehicles are GM, but I hope they die now, since they have put a satellite tracking device system called 'OnStar' in all their new vehicles.

[Revenant]

A story has surfaced on the Latin American Herald Tribune (a publication we hadn't previously heard of) stating that General Motors was planning to invest $1 billion in it's Brazilian operations to update its South American products. So far, that part of the story is true. However, that's where the truth apparently ends. The story goes on to say that GM plans to use money obtained from the proposed government bailout package to pay for the Brazilian investment.

We contacted General Motors to check on the story and spokesman Richard James replied, "I don't know if something got lost in translation but Jaime Ardila, President of GM Brazil did NOT say that funding for GMB projects would come from the US financial aid package. GM Brazil has $1 billion in investments that have already been approved but they will be financed by our Brazilian operations through local sources."

Just as Opel (GM's German division) is going to the German government for assistance, GM Brazil-Mercosur is raising capital in that country. During the congressional hearings this week, CEO Rick Wagoner also indicated that GM operations in different regions are each funding projects locally in response to a question about a recent expansion in Russia. It appears that any money that GM gets from the US government will stay here.

http://www.autoblog.com/2008/11/22/g...ian-operation/

[Revenant]

My current and 2 prior vehicles are GM, but I hope they die now, since they have put a satellite tracking device system called 'OnStar' in all their new vehicles.

Our local arm of GM (GMH) has something similar called Holden Assist. I got my Auto electrician to disable it for less than $50. Didn't affect my warranty either because I don't use dealership auto services.