GM Bankruptcy to not impact China operations
General Motors stated that its US bankruptcy filing will have no impact on its thriving China operations, reaffirming what it called its "aggressive growth strategy." Our operations across China will operate normally," Kevin Wale, president and managing director of the GM China Group, said in a statement.
"Our customers will continue to receive top-notch service and warranty coverage, while our dealers will continue to receive product and aftersales parts as usual. There will be no impact on payments to employees, dealers or suppliers contracted to GM China or to our joint ventures," Wale said.
The company filed for Chapter 11 bankruptcy protection Monday as part of the US government's plan to shrink the automaker to a sustainable size. The bankruptcy filing is the 4th largest in American history and the largest for an industrial company. But Detroit-based GM's plans for continued growth in China, where its sales rose 34% in January-May from a year earlier.
"GM has a specific development plan in China for the next five years that demonstrates our great confidence in the country," Wale said.
GM executives have sought to reassure customers and business partners of the company's commitment to China, despite its woes elsewhere. According to GM's figures, auto sales grew 18.8% in China in the first five months of the year, thanks partly to tax cuts and other incentives aimed at promoting sales of small vehicles, one of GM's strengths in this market.
China is GM's second largest national market after the United States, followed by Brazil, the United Kingdom, Canada, Russia and Germany. The company plans to close seven powertrain and parts stamping plants starting in June 2010, while an additional stamping plant will be idled but remain in a standby capacity. The automaker also plans to cut about 34% of its work force. But in China, GM is still looking to expand.
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