GM is cutting jobs in China as part of a significant restructuring effort aimed at revitalizing its operations in one of the world’s most competitive automotive markets. This move follows General Motors’ recent financial struggles in the region, highlighted by a $104 million loss in the Chinese market for the second quarter of 2024. The cuts are part of a broader plan to make GM’s Chinese business self-sustaining, minimizing the need for external capital and responding to the intense competition from local Chinese auto brands.
According to a report from Bloomberg, the job cuts have affected GM China’s research and development department, signaling a strategic shift in the company’s approach to its China-based operations. General Motors is also expected to engage in discussions with its local partner, SAIC Motor Corporation, to explore further capacity reductions.
General Motors’ restructuring in China is tied to the company’s strategy to pivot towards producing more upscale and electric vehicles (EVs). However, the automaker will continue to manufacture and export lower-cost models through its joint venture with SAIC and Wuling Motors, which has seen more resilient performance despite the broader market challenges. This joint venture, known as SAIC-GM-Wuling, focuses on producing smaller, affordable electric vehicles, a segment where local competition has been fierce.
The challenges in China’s automotive market, particularly for international brands like GM, are driven by domestic automakers prioritizing market share over profitability. This aggressive approach by local brands has put pressure on foreign manufacturers, leading to declining sales for General Motors’ US-branded vehicles, including Buick, Cadillac, and Chevy. Despite these challenges, General Motors remains committed to its Chinese operations, with the goal of returning to profitability before the expiration of its 30-year contract with SAIC in 2027.
General Motors reported a total loss of $210 million in China for the first half of 2024. During a recent automotive conference, GM CFO Paul Jacobson emphasized the company’s ongoing commitment to China, despite the current challenges. “I don’t necessarily accept the notion that we’re struggling to make money [in China],” Jacobson stated during the conference.
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Comments
Entirely predictable. Why was I, just an average dude, able to see what was going to happen and GM’s highly paid staff had no clue. They used GM and other foreign automakers to teach them, train them, and harvest more than 100 years of automaking knowledge so that now they can do what once only we could do. Now they’re done with the stupid Americans and they’re planning to take over as the world’s supplier of Automobiles. Today GM lays off in China, tomorrow it’ll be Mexico and Brazil and eventually all the plants left in the USA.
“I don’t necessarily accept the notion that we’re struggling to make money [in China]” – Captain Edward Smith also didn’t want to accept that the Titanic could sink. And now she rests at the bottom of the Atlantic. So if ignorance is how we run the ship it only takes one iceberg to sink her.
It’s called Global Economy /Market. You cannot blame only GM for this. Hundreds of other manufacturers did the same move. Most of them made money in the short term. The long term consequences are surfacing later on. In this era, the technology transfer would have happened anyway. Everybody is blaming the government for interfering with the free enterprise. At least they put a stop on the transfer of technology for the high end electronics.
Yes and not just cars. TVs too. Hence why we have Hisense and TCL now. But on a positive note, in the case with TVs, Samsung and LG retains a combined whopping 52% of the US market share, followed by Vizio at 11%, Sony at 7%, and Hisense and TCL each at 5% of the US market share.
Laptops also. HP at 32% US market share, Apple 28%, Dell 24%, Acer 14%, and Lenovo, a well established Chinese laptop brand, at 12%.
I know I am comparing apples to oranges here, but I do wonder if the “fear of the Chinese” may be a bit overblown. People in the US are still very much brand focused over simply buying what’s cheap. That’s not to say a brand like BYD won’t carve out its own share (clearly Hisense, TCL, and Lenovo have). Also, from what I understand, in the EU, BYDs aren’t nearly as cheap as they are in China. I doubt they would be as cheap here either even if they get around tariffs by being made in Mexico.
Chinese Market: “Yeah we’re done with you. We milked you for everything you were worth and now our homegrown cars are just as good for less of a price and we will now go after your market share elsewhere.”
GM: “We are still committed to the Chinese market.”
My god GM reminds me of these women whose men beat them and they are like “He beats me because he loves me and cares about me.”
Mary must love communism and the China people ..
They dumped Pontiac to build Buicks for China. Who could have seen this coming. Now the country Mary screwed out of Pontiac is stuck with Buick. What’s next Sean THE PAIN Fain is going to run GM?
Decision to enter China should have never happened. Another Action of failure where ‘Greed’ leads one to such an Outcome. GM as well as other major Corporations should stay Loyal to its Origin; however, Greed has always been a Large Foolish Player with such events. Hope all works out for you Mr. & Mrs. GM! As an old saying, “One should never forget where they came from”. Cheers – RG
Ray: Agreed. They really shot themselves in the foot, and too easily signed away proprietary construction technology….
3 years from now both GM and FORD will be tired of Losing $MILLIONS in China per year and will walk away.
A few commentators have said the only foreign vehicles will be German and Russian.
Russians? LMAO! Have you seen the latest LADAs and UAZ models lately? They have cars that are all still stuck in the 80s and the Chinese are now dumping their own cars in Russia. If for a cheap price, Russians can own a more modern, up to date with the times, and better equipped Chinese car over a LADA that hasn’t been redesigned since the 80s or 90s they will take them. In 10 years, I doubt Russia will have any car company left and they can thank the Chinese they decided to cozy up to after the Ukraine invasion because if they think the Chinese give a dam about them they are in for a rude awakening.
More foreign car manufacturers are building in the US than domestic manufacturers, build cars here and provide jobs for our workers and export to other countries.
Willing to bet no upper management is going to take a pay cut.Bad decisions on their part leave the working people to get laid off