GM preparing for a $1 billion expansion in Brazil
General Motors says it is to invest more than $1 billion to develop two new car models in Brazil despite woes at the company’s US headquarters. GM says the planned investment should create about 1,000 jobs. A government tax break which cut the cost of new vehicles in Brazil, led to GM seeing record sales in the country.
The expansion comes as GM emerges from bankruptcy proceedings as a private company which is majority owned by the US government. However, GM in Brazil is financially independent of the US company – and it has been keen to stress that there will be no dependence on products from the United States.
Half of the investment will come from the company itself and the rest from loans from state-run banks, says the BBC’s Gary Duffy in Sao Paulo…
The US government has a 60.8% stake in the new U.S. company, while Canada and a United Auto Workers union retiree healthcare trust fund also have a stake.
The “old GM” will retain a 10% stake – this is to allow creditors to recover some of their losses.
Looking at the value of some of their latest product, I actually think they can work their way out of the dungeon a bit faster than expected. Their design studio is still stuck in the 1950’s’ but, then, that’s true of a significant portion of the world’s consumers.