DETROIT — General Motors’ decision to largely pull out of Australia, New Zealand and Thailand as part of a strategy to exit markets that don’t produce adequate returns on investments caused dismay Monday from officials concerned over job losses.
“This is a very disappointing outcome,” said Karen Andrews, Australia’s minister for Industry, Science and Technology. She said it was unfortunate both because about 500 workers would lose their jobs, but also because “they only advised the government of this decision just before the announcement.”
The company said in a statement late Sunday that it plans to wind down sales, engineering and design operations for its historic Holden brand in Australia and New Zealand in 2021. It also plans to sell its Rayong factory in Thailand to China’s Great Wall Motors and withdraw the Chevrolet brand from Thailand by the end of this year.
Dave Smith of the Australian Manufacturing Workers’ Union also expressed chagrin.
Workers at Holden had thought they’d “been through the worst of it, and that’s not the case,” Smith said. “For many of them their long-term workers have been very loyal to the company … they’ve loved being part of the car industry, and now, it was such an iconic brand coming to an end; it’ll mean an end to their jobs.”
GM has 828 employees in Australia and New Zealand and another 1,500 in Thailand, the company said.
In Thailand, the decision to sell GM’s plant in Rayong, south of Bangkok, may well end up being good news for workers there.
Great Wall Motors, a major maker of sport utility vehicles and pickups, said it intends to expand in Southeast Asia using the plant in Thailand as its base.
“We will also promote the development of the local supply chain, research and development and related industries, plus contribute more to the exchequer of both the local Rayong and Thailand governments,” Great Wall’s vice president for global strategy, Liu Xiangshang.
Thailand is still determined to be the “Detroit of Asia,” Krichanont Iyapunya, a spokesman for the Ministry of Industry said. He said plant closures and openings happen constantly.
“The automobile industry must be adaptive,” Krichanont said.
GM has struggled in Asia in the past year. Its International Operations, which include China, lost $200 million last year, including $100 million in the fourth quarter. It analyzed the business case for future production at the Rayong plant, but low utilization of its capacity and low sales volumes “made continued GM production at the site unsustainable,” the company said.
GM’s CEO, Mary Barra, said the company wants to focus on markets where it can drive strong returns, scaling back operations in Australia, New Zealand and Thailand to selling niche specialty vehicles. GM will support its employees and customers in the transition, she said.
GM is making the same moves in Japan, Russia and Europe, where “we don’t have significant scale,” she said.
“We are pursuing a niche presence by selling profitable high-end imported vehicles supported by a lean GM structure,” International Operations Senior Vice President Julian Blissett said in the statement.
