GM Splits Off South America From International Unit

In a move to fine tune international operations , General Motors is creating a separate sales region for South America. The head of the new unit – headquartered in Sao Paulo, Brazil – will report directly to CEO Ed Whitacre. Before this decision, South America was part of GM’s International Operations that included all countries outside of North American and Europe.

The move makes South America GM’s fourth biggest global region (by volume). In the first five months of 2010, GM’s sales in South America have increased 17 percent to 394,000 vehicles. This represents nearly 12 percent of our favorite automaker’s global sales volume.

“With the rapidly growing markets in Asia, the Middle East and Russia, we need the GMIO team focused exclusively on those countries that are critical to our growth,” Whitacre said in a statement.

Currently, the United States is GM’s largest national market, followed by China, Brazil, Germany, the United Kingdom, Canada, and Italy.

GM South America will be headed by Jaime Ardila, who leaves his post as President of GM Mercosur (that includes Argentina, Brazil, Paraguay, and Uruguay). Starting July 1, Denise Johnson will report to Ardila as President of GM Brazil. Johnson is currently Vice President of labor relations and will be succeeded by Catherine Clegg, who will vacate her post as Manufacturing Manager of GM North America. GM said it would announce Clegg’s successor soon.

The GM Authority Take

This is another much-welcomed move that furthers GM’s global restructuring efforts. GM’s decision to make South America a separate sales region increases focus on the multitude of South America’s emerging markets and places more responsibility on Ardila and his team, allowing GM to compete more effectively in the region. After all the investments GM has been making in South America (especially Brazil), this reorganization was to be expected. I hope that GM does the same for other important regions that are currently part of GM International, including China, Russia/Middle East, and maybe India.