General Motors will lay off all 1,500 of its employees at the Rayong plant in Thailand after signing a binding agreement with China’s Great Wall Motors to sell the facility.
Jak Punchoopet, Thailand’s adviser to the Minister of Labor, told Reuters this week that GM’s agreement with Great Wall Motors did not include the transfer of employees. The Rayong plant is actually a complex of different manufacturing facilities and includes a vehicle assembly line as well as a powertrain and engine assembly line. Punchoopet said the first layoffs will hit the engine line before extending to the vehicle line later on.
“Their plan is to lay off 1,000 employees in the auto parts manufacturing line in June, and then around 300 to 400 in the assembly line in October,” he told Reuters.
GM must adhere to local Thai labor laws and provide some sort of severance package to employees that are laid off. Punchoopet said GM plans on providing former Rayong plant employees with a lump-sum bonus equivalent to four months of pay.
GM Southeast Asia marketing and communications director, Sean Poppitt, could not say whether any of its former Rayong workers may be rehired by Great Wall Motors when asked by Reuters.
The automaker announced earlier this week that it would sell the Rayong plant to Great Wall Motors and pull Chevrolet out of the Thai market. In a statement, GM said it “undertook a detailed analysis of the business case for future production at the Rayong manufacturing facility in Thailand,” and decided that “low plant utilization and forecast volumes have made continued GM production at the site unsustainable.”
“Our decision to cease production at the Rayong site is based on GM’s global strategy and optimization of our manufacturing footprint around the world. In this context, sale of the Rayong plants to (Great Wall Motors) is the best option to support future vehicle manufacturing at this site,” GM international operations senior VP Julian Blissett said.
Great Wall Motors is expected to build vehicles from its Haval crossover and SUV brand at the Rayong plant, which will be sold locally and exported to other nearby markets, such as Australia.