GM exit no surprise, says Davies
Global giant to sell its plant in PE to Izuzu
GENERAL Motors (GM) informed employees and unions yesterday morning that it is quitting SA. Besides its light commercial vehicle manufacturing operations in Struandale, Port Elizabeth, which it was selling to Isuzu, the US car maker intended to cease its South African operations by the end of 2017, GM said on its website.
The announcement of its exit from SA and India yesterday followed a March 5 announcement that General Motors was exiting Europe by selling its Opel brand to the French maker of Peugeot and Citroën, PSA for $2.3-billion (R31-billion).
“After a thorough assessment of our South African operations, we believe it is best for Isuzu to integrate our light commercial vehicle manufacturing operations into its African business,” General Motors vice-president of its international operations, Stefan Jacoby, said in a statement yesterday morning.
“We determined that continued or increased investment in manufacturing in South Africa would not provide GM the expected returns of other global investment opportunities.”
In reaction, Trade and Industry Minister Rob Davies expressed regret and concern for the numerous employees whose jobs and livelihood would be directly and indirectly affected.
But Davies said GM’s departure was not surprising, considering it had failed to meet the minimum production volume of 50 000 units required by the government’s Automotive Production and Development Programme (APDP) since 2013.
“Sales have been on a downward trend for the past five years, and exports remained low at about 2 000 vehicles per annum with a maximum of 3 500 units,” Davies said.
“Although we do not welcome this decision, we believe that the future of the industry is positive as automotive industry stakeholders are finalising a master plan for SA with a view to growing domestic vehicle production volume and local value addition, and an announcement on the final programme can be expected early 2018 latest and will cover the period post 2020,” he said.
Davies downplayed that GM’s decision was a criticism of ANC policies, noting GM had exited Australia in 2013, where it had a joint venture with Holden. GM also closed a plant in Indonesia in 2015 and another in India in April.
In March, it exited Europe by selling its Opel and Vauxhall brands to Peugeot.
The home page of General Motors SA’s website yesterday morning was changed to a frequently asked questions site for owners of its Chevrolet and Opel brands.
The answer to the question, “What does this mean for me?” is: “If you are an Isuzu, Chevrolet or Opel owner ongoing aftersales and parts support will continue through the existing GM dealer network to the end of 2017. All existing warranties and service plans remain in place and will be honoured beyond 2017.
“From 2018, Isuzu dealers will provide aftersales and service support to Chevrolet and Opel customers until the details of our discussions with PSA have been finalised.”
General Motors said in its statement that Isuzu would purchase GM’s Struandale plant and its remaining 30% in Isuzu Truck SA. – BDLive-AFP