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.
Comments
Hey Oshawa! How are those Spanish lessons coming along?
This might explain why GM, in a booming Canadian market, has fallen below Kia/Hyundai in total sales and Kia/Hyundai don’t have any trucks.
Also, in a highly lucrative luxury market, Cadillac is virtually non-existent in Canada yet more AMGs are being sold in the Toronto area alone than in the entire state of California.
Do people realize that GM has more than just Oshawa in Canada. And that GM has made recent announcements for new product in Canada. And with the lower Canadian dollar manufacturing is now less expensive than the US?
Yes Oshawa is loosing product. But It has production plans through 2017. The union contract is up in 2016. Looking at future GM plans they will be production constrained in North America. So I don’t see Oshawa closing.
As much as one should dislike the fact that your tax money is spent in third world countries such as Mexico (where your crew cab Silverado is built), at the same time, it keeps that investment out of reach of the UAW thugs, when GM cars are built in other countries. No matter how you look at it, you lose.
UAW are far from thugs. They are American workers demanding a fair wage.
They have no desire to work like Chinese surfs locked in industrial dorms with five minute lunch breaks.
I could never understand why a large segment of Americans and Canadians are against their fellow citizens asking for, and making a decent wage, even if they have to go through a union to get it.
What every country needs, especially Australia with losing its car plants, is first tell the World Trade Organization to MYOB, then a return of something similar to the Auto Pact, only covering more countries, where if you want to sell a vehicle in my country, you will build a vehicle in my country, not necessarily the same vehicle, or you can leave, period.
Many countries have that expectation now and make entry into their markets prohibitive unless you build there. How many vehicles or parts does the US export to Korea or Japan?
Great idea, Dave! At least one car factory in each and every of the about 200 countries on this planet.
Including in Luxemburg, Bhutan, Iceland and Lesotho. And Grenada. And only cars produced locally can be sold and will be street legal.
He, the Seychelles also must have a car factory, or do all people there only drive by boat?
And the Faroer Islands, of course, too, and Monaco and Liechtenstein and Andorra.
Anybody wants a good wage.
Except those people like Magirus who obviously prefer to live like a modern wage slave, taking a page cut at least every year, if not more frequently.