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mises
Joined: 05 Nov 2007
Location: retired
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 Posted: Fri Jan 30, 2009 6:57 pm Post subject: General Motors To Invest $1 Billion of TARP Funds in Brazil |
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Money to Come from U.S. Rescue Program
SAO PAULO -- 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. |
http://www.laht.com/article.asp?CategoryId=12396&ArticleId=320909
Are we outraged yet? |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Fri Jan 30, 2009 7:04 pm Post subject: |
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| Outraged yet? Crap, few of us on this forum were in favor of such a stupid bailout to begin with. I'm quite skeptical of the "stimulus" package that was passed by the House this week, and events such as this don't help that skepticism whatsoever. |
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postfundie
Joined: 28 May 2004
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| Posted: Fri Jan 30, 2009 7:26 pm Post subject: |
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I'd need more info to be outraged. (for example what's the IRR and NPV on those projects/factories/destination<s> in Brazil?) The whole goal of GM getting Government money is for them not to go bankrupt. Maybe they've already put a ton of money into their operations in Brazil. To stay in Business they need to be competitive and right now Toyota and other Companies in the South are kicking their asses.
Also do you have a copy of this story being picked up by the NYT or some other major American media outlet? It's source seems somewhat spurious.
http://www.autoblog.com/2008/11/22/gm-not-sending-any-bailout-money-to-brazilian-operation/
GM not sending any bailout money to Brazilian operation
by Sam Abuelsamid on Nov 22nd 2008 at 8:49PM
A story has surfaced on the Latin American Herald Tribune (a publication we hadn't previously heard of) stating that General Motors was planning to invest $1 billion in it's Brazilian operations to update its South American products. So far, that part of the story is true. However, that's where the truth apparently ends. The story goes on to say that GM plans to use money obtained from the proposed government bailout package to pay for the Brazilian investment.
We contacted General Motors to check on the story and spokesman Richard James replied, "I don't know if something got lost in translation but Jaime Ardila, President of GM Brazil did NOT say that funding for GMB projects would come from the US financial aid package. GM Brazil has $1 billion in investments that have already been approved but they will be financed by our Brazilian operations through local sources."
Just as Opel (GM's German division) is going to the German government for assistance, GM Brazil-Mercosur is raising capital in that country. During the congressional hearings this week, CEO Rick Wagoner also indicated that GM operations in different regions are each funding projects locally in response to a question about a recent expansion in Russia. It appears that any money that GM gets from the US government will stay here. |
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Gopher
Joined: 04 Jun 2005
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| Posted: Fri Jan 30, 2009 7:51 pm Post subject: |
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Here is the last item treating Latin America to appear on GM's corporate webpage...
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GM Latin America, Africa and Middle East Sets All-Time Sales Record in 2008
All-time record 1,276,332* units in 2008
Sales up 3.2%, 40,000 units over 2007
2008 market share improves to 17.1%
Miramar, FL - General Motors Latin America, Africa and Middle East (GM LAAM) region posted an all-time sales record in 2008, selling over 1.276 million vehicles, up 40,000 units over 2007, representing a 3.2 percent growth rate. In addition, LAAM's market share increased to 17.1 percent for the year... |
GM Press Release
GM's Brazilian operations profile |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sat Jan 31, 2009 6:23 am Post subject: |
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| postfundie wrote: |
Also do you have a copy of this story being picked up by the NYT or some other major American media outlet? It's source seems somewhat spurious.
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Yeah, that was the first time I'd seen the Latin American Herald Tribune, ever. But it was linked to from an economics site I trust.. |
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