GM’s decision to end much of its production in Russia is not an isolated incident. Instead, it’s a reflection of the company’s new found discipline, an approach that involves placing sure-fire bets just as much as knowing when to trim the fat, according to GM President Dan Ammann .
The preferred method “would typically be to defer investment and hunker down, contain losses and see what happens,” Ammann told Automotive News during the week leading up to the 2015 New York Auto Show. However, today’s executive team is far more selective about where it chooses to deploy capital, he said.
“I think it’s a much clearer realization that resources are scarce,” he told AN. “We have a wide range of things that we could invest in. The technology investment requirements of the business are only going to go up.”
Russia is just one of many places where the company has recently decided to wind down operations. In February, the company said it would wind-down an assembly plant in Indonesia and layoff 500 workers – just two years after it dropped $150-million into the plant.
In 2013, the company also announced it would end manufacturing in Australia, making it an import-only market. In the same year it also announced it would end most Chevrolet sales in Europe, choosing to focus on Opel-Vauxhall instead.
So, rather than slowly bleed-out, GM has decided to double down on safe bets and cut its losses where it can.