1 min read.Updated: 17 Feb 2020, 09:36 AM ISTBloomberg
The largest US automaker said it will take $1.1 billion in charges mostly in the first quarter
As GM downsizes overseas, the company is pouring money into electric vehicles in a bid to catch Tesla Inc
General Motors Co. said it will leave Australia, New Zealand and Thailand by year-end as it continues to exit poor-performing markets and focus its resources on new technologies like self-driving cars and electric vehicles.
The largest US automaker said it will take $1.1 billion in charges mostly in the first quarter, of which $300 million is cash, to cover the costs of leaving those markets. The company will retire the Australian Holden brand, withdraw the Chevrolet brand from Thailand and sell its Rayong plant there to China’s Great Wall Motor Co., GM said in a statement.
GM’s downsizing comes as Chief Executive Officer Mary Barra continues to shrink the automaker to the point where it gets almost all of its profits from the US and China. The company has made a calculated gamble to reduce its global presence and invest in technology rather than sinking money into attempts at fixing its core business.
“I’ve often said that we will do the right thing, even when it’s hard, and this is one of those times," Barra said in a statement. “We have the right strategies to drive robust returns, and prioritizing global investments that will drive growth in the future of mobility."
The downsizing is part of a long-running strategy for GM since the Detroit-based company emerged from bankruptcy in 2009. The company pulled the Chevrolet brand from Europe in 2015, left Russia that same year and sold its German Opel unit and British Vauxhaul brand to France’s Peugeot SA in 2017.
The company will also wind down its sales, design and engineering operations in Australia and New Zealand and retire the Holden brand by 2021. GM President Mark Reuss ran Holden in 2008 and 2009, but since then its market share has fallen from almost 13% to 4.1%, GM said in a statement.
As GM downsizes overseas, the company is pouring money into electric vehicles in a bid to catch Tesla Inc. GM has already spent several billions to develop self-driving cars with Cruise LLC, which it bought in 2016.