While Monday will be seen by many as “the day General Motors went bankrupt,” the filing did not include most of the company’s massive operations that sprawl the globe.
Not only did GM Canada dodge a filing, all of GM’s operations are expected to continue without interruption in Europe, Latin America, Africa and the Middle East, and Asia Pacific regions.
Here’s a look at where the company is producing, selling and marketing cars and how it fits into the company’s wider restructuring.
Division: GM North America
What it is: GM North America has operations in the United States, Canada, and Mexico. In the first quarter, GM North America’s sales fell by 50% to US$12.3-billion compared with the same quarter last year driven by sales declines in all regions, after its production volumes were slashed by 46% due in part to a depressed global industry. While the Canadian and Mexican units were able to avoid a court-run restructuring they are far from unaffected by the parent company’s retreat.
What is happening to it: The company said Monday it intends to further reduce its salaried employees in North America from its year-end total of 35,100 workers to 27,200 this year as part of its restructuring plan, although no specific regional breakdown was given. GM has said, however, it expects to employ 5,500 people in Canada by 2014. As part of the deal reached with the Canadian and Ontario governments Monday, GM must maintain a 19% share of its combined Canada-U.S. production capacity north of the border. It also agreed to spend $2.2-billion through 2016 on capital investments in its Canadian plants. It must also invest $1-billion in research and development in Canada.
Division: GM Europe
What it is: In Europe, GM sells its vehicles in 40 markets, operates 10 vehicle production and assembly facilities in seven countries and employs roughly 54,000 people. It sold over 2 million vehicles last year in Europe, but still lost US$1.6-billion. While the division primarily sells cars under the Opel and Vauxhall brands, it also sells Cadillacs, Saabs, Hummers and Chevrolets in Europe.
What is happening to it: GM has selected a consortium led by Frank Stronach’s Magna International Inc. to buy its German-based unit Opel unit in a rescue bid supported by Russia’s state-run lender Sberbank. Opel is based in Ruesselsheim, Germany, near Frankfurt and employs 25,000 staff. It is part of a GM Europe operation that makes cars in Spain, Poland, Belgium and Britain, where Opel cars are sold under the Vauxhall brand.
The Magna deal is valued at 1.3-billion euros, and two German states with major Opel factories have also given their support for the deal that would save the German auto-maker from insolvency.
Under the terms of the deal, which is still being finalized, Magna would own 20% of Opel, with Sberbank holding 35% and GM retaining the remainder.
Division: General Motors Latin America, Africa & Middle East region (GM LAAM)
What it is: GM LAAM employs approximately 33,000 people and enjoys a long-standing leadership position in such markets as Saudi Arabia, United Arab Emirates, Kenya, and Egypt. But the division’s sales dropped 15% in the first quarter to US$3.4-billion due to declining demand and an overall 24% decline in production.
What is happening to it: GM LAAM does remain profitable, turning in $500-million in earnings during the first quarter all the while improving its sales in Ecuador and Peru and growing its market share in Colombia, Ecuador, Chile, Peru, Venezuela, Egypt, Kenya and North Africa
Its brands include Opel, Hummer, Chevrolet, Izuzu, Suzuki, Cadillac, GMC, and Saab and is expected to be almost completed unaffected by Monday’s Chapter 11 filing.
Division: GM Asia-Pacific
What it is: GM Asia-Pacific sells cars in 11 in different markets including China, Japan, Korea, Australia, New Zealand, and others. Sales in China, in particular, have been soaring, jumping by 17% in the first quarter driven by strong SAIC-GM-Wuling performance and an aggressive government stimulus.
What is happening to it: Analysts doubt that a Chapter 11 filing would have any serious impact on GM’s China unit, one of its few profitable operations globally. Despite the popularity of many of its brands in China, the division has been facing declining demand and production volumes in almost every other country in the region, leading an overall 55% drop in sales for the division and a $21-million loss during the first quarter. Its brands in Asia include Buick, Cadillac, Chevrolet, Daewoo, Holden, Opel, and Saab.
