General Motors Corp.'s operations in China, South Korea and Australia expect no immediate effect from the company's bankruptcy filing and will be part of the reorganized carmaker majority-owned by the U.S. government.
"Our operations across China will operate normally," Kevin Wale, president and managing director of GM China, said in an e-mailed statement. "There will be no impact on payments to employees, dealers or suppliers contracted to GM China or to our joint ventures."
GM, the largest overseas automaker in China, did not include its international operations in a filing for bankruptcy protection yesterday in New York. GM Daewoo Auto & Technology Co., the company's South Korean unit, builds about 20 percent of vehicles sold by the Detroit-based carmaker.
"GM Daewoo will play an important role in the new company's global business strategy," Chief Executive Officer Michael Grimaldi said. "Our Korean employees and business partners will contribute to the reinvention of GM."
Still, the bankruptcy filing may hurt overseas sales if GM's image suffers, said Lee Hang Koo, a research fellow at Korea Institute for Industrial Economics & Trade.
"GM Daewoo would inevitably face shrinking sales even as GM is reorganized into a new company because of falling brand image and a weakened sales network," Lee said ahead of GM's bankruptcy filling.
Suzuki Loans
Suzuki Motor Corp., formerly a GM affiliate, will be affected. Suzuki, Japan's fourth-largest carmaker, said it may not be able to collect 29.4 billion yen ($306 million) in outstanding loans and accounts receivables owed by GM subsidiaries because of the bankruptcy filing. The company will set aside money to cover potential losses, it said in a statement.
SAIC Motor Corp., GM's biggest China partner, said it was confident their Shanghai-based venture will develop in a "healthy, stable manner" and said shareholders' rights, as well as the assets, brands and technology of the venture will be part of the new GM.
GM's sales in China in the first five months of the year rose 33.8 percent from a year earlier, the statement said, without providing a figure. The company's sales rose 50 percent in April to a monthly record of 151,084 units.
GM's Australian unit, GM Holden Ltd., expects to be part of the new GM and will not cut jobs, the unit's managing director Mark Reuss said today.
