Foundry Daily News

General Motors to Invest $1 Billion in Brazil Operations

<font face="Arial,sans-serif" size="2">General Motors plans to invest $1 billion in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market, said the beleaguered car maker.</font>

<font face="Arial,sans-serif" size="2">According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the government and will be used to "complete the renovation of the line of products up to 2012."</font>

<font face="Arial,sans-serif" size="2">"It wouldn't be logical to withdraw the investment from where we're growing, and our goal is to protect investments in emerging markets," he said in a statement published by the business daily Gazeta Mercantil.</font>

<font face="Arial,sans-serif" size="2">Meanwhile, he cut the company's revenue forecast for this year by 14% to $9.5 billion from $11 billion, as the economic crisis began to cause rapid slowdowns in sales. </font>

<font face="Arial,sans-serif" size="2">GM already announced three programs of paid leave, and Ardila added that GM Brazil "is going to wait and see how the market behaves in order to know what decision to take" with regard to possible layoffs.</font>

<font face="Arial,sans-serif" size="2">For Ardila, the injection in Brazil's automobile sector of 8 billion reais ($3.51 billion) recently announced by the federal and state governments of Sao Paulo "has already begun to revive sales," which fell by 12% in October.</font>

<font face="Arial,sans-serif" size="2">The executive said that the company will operate a "conservative" scenario in 2009 with an estimated production of 2.6 million units, and another more "optimistic" that contemplates sales of 2.9 million.</font>

<font face="Arial,sans-serif" size="2">This year sales will reach 2.85 million vehicles, which represents a growth of 15% over last year.<br>&nbsp;<br>Source: Herald Tribune</font>

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