The bluff of the market leader

IMPASSE Faced with declining profits, GM is studying the closure of factories in Brazil, including
of São Caetano (Credit: Dado Galdieri)

The news fell like a bomb between the workers of the company. GM issued an internal statement to all employees on Friday, highlighting the difficulties of continuing to operate in Brazil and the possibility of plant closures and even production disruptions in South America. of the document, which presents GM in a deep crisis, although it is the manufacturer that sells the largest number of cars in the country, his model Onix, which costs R $ 48 000, figure for three years in the head of the ranking of best sellers. of the market. Even in this case, GM Mercosul's chairman, Carlos Zarlenga, said the company "has experienced significant overall losses between 2016 and 2018 that can not be repeated". And he stressed that the builder was at a critical moment that "will require significant sacrifices from all and that 2019 will be a decisive year for our history".

Last Tuesday, Zarlenga met with the leaders of the metalworkers' unions of São José. Campos and São Caetano, where GM has factories in São Paulo, and with the mayors of both municipalities, Felicio Ramuth and José Auricchio Júnior, to discuss a feasibility plan for the company. The plan requires support from governments, dealers, employees, unions and suppliers. According to Zarlenga, their success will depend on GM's new investments and future. "We of course express our opposition to the ongoing restructuring, factory closures, lay-offs and all this project that aims to unburden workers on a crisis that does not even exist," he said. said Renato Almeida, vice president. of the Metallurgical Workers' Union of São José dos Campos. "The situation presented by GM is very contradictory, they have not inflicted this loss on us and we want the company to open its cash books to begin a negotiation process." GM

One of the immediate objectives of GM's threat to close factories or leave the country is to obtain tax benefits and put pressure on labor costs. The São Paulo government, through Finance Secretary Henrique Meirelles, said it could grant tax incentives to GM and, consequently, to all state-owned automakers. . Meirelles recognizes the difficulties of the sector and plans to anticipate the ICMS credits to which the industry is entitled in exchange for the immediate tax deduction.

Although the motor vehicle market has suffered a sharp drop between 2014 and 2016, it presents the last two years. recovery trend. Last year, for example, new vehicle licenses increased by 13% and GM's sales volume increased by 11.7%. The company has sold 434,300 cars and light trucks in the country, but claims to have suffered losses estimated at 1 billion rand over the period. Globally, the company had positive results and made a profit of $ 2.53 billion in the third quarter of last year. GM controls four factories in Brazil. In addition to São Caetano and São José dos Campos, it has units in Gravataí (RS) and Joinville (SC), where it produces engines. In São Caetano, the Onix, Cobalt, Spin and Montana models are manufactured. From Gravataí, the Onix and Prisma leave. And the 4,000-strong São José dos Campos unit produces the S-10 pickup truck and the SUV Trailblazer, as well as engines and transmissions.

World Trade

In the past two years, GM has shown signs of loss of interest in some markets. Emerging Markets. It closed factories in Russia and Indonesia and slowed operations in Thailand. It also plans to sell Opel to PSA Peugeot Citröen and suspend operations in India and South Africa As part of a restructuring plan announced in November, GM World President Mary Barra has announced the closure. four plants in the United States, including one in the United States. Canada and two others in other regions. In Brazil, the most endangered plant is that of São José dos Campos. This has been postponed in the last phases of the automaker's investment and since 2012, when he lost the production lines of popular models, is a hotbed of tension between the company and the union.