Steve G.

GM plans to invest $1 billion of US bailout money in Brazil

In Congress, Economics, George Bush, Media, Nanny State, People in the news, Politics, US Government on November 21, 2008 at 3:38 am

From Latin American Herald Tribune:

By Russ Dallen
Latin American Herald Tribune staff

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.

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 U.S. government and will be used to “complete the renovation of the line of products up to 2012.”

“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.

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. 

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.

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.

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.

This year sales will reach 2.85 million vehicles, which represents a growth of 15% over last year.

Russ Dallen with EFE in Sao Paulo

Hat tip Brad Spangler

  1. “to avoid the kind of problems the U.S. automaker is facing in its home market, ”
    i.e, the UAW, which is the entity really getting bailed out here.

  2. What the crap! Does this not tick off anybody else?!?
    I thought that the justification for giving my money to the auto industry was that the auto industry is a critical part of the AMERICAN economy. I didn’t know that they meant SOUTH AMERICA!
    The bail out money is supposed to salvage the industry in this country and save millions of American’s their jobs.
    I do agree that not only is UAW going to benifit more from the bail out than all workers combined, but they, the UAW, are a major cause of it being necessary in the first place.
    UAW, what a racket. If I tried to set up an organization like that one, I’d be imprisoned for the rest of my days.

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