General Motors to invest $1 bn in Brazil plant
US automobile giant General Motors plans to invest $1 billion in Brazil to avoid in their Latin American unit the kind of problems it is facing at home.world Updated: Nov 19, 2008 11:57 IST
US automobile giant General Motors (GM) plans to invest $1 billion in Brazil to avoid in their Latin American unit the kind of problems it is facing at home, EFE reported on Wednesday.
According to Jaime Ardila, chief of GM Brazil-Mercosur, the funding will come from the bailout package from the US 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.
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.
Ardila said the injection in Brazil's automobile sector of eight billion reais ($3.51 billion) recently announced by the Brazilian government and the provincial administration of Sao Paulo "has already begun to revive sales", which fell by 12 percent in October.
He said the company will operate in a "conservative" scenario in 2009 with an estimated production of 2.6 million units.
This year sales will reach 2.85 million vehicles, which represents a growth of 15 percent over last year.
Three US auto behemoths - Ford, GM and Chrysler - have appealed to Congress for a $25 billion bail-out package to save their firms from imminent collapse, warning that it could be catastrophic for the economy as a whole.
GM said it could run out of cash in weeks and cannot wait until president-elect Barack Obama - who has promised to help the industry - is inaugurated in January.