crossorigin="anonymous"> GM expects a more than $5 billion impact from the China restructuring, including plant closings – Subrang Safar: Your Journey Through Colors, Fashion, and Lifestyle

GM expects a more than $5 billion impact from the China restructuring, including plant closings


Detroit – General Motors expects to restructure its joint venture operations with SAIC MOTOR CORPORATION Non-cash charges and writedowns in China will cost the Detroit automaker more than $5 billion disclosed in a federal filing Wednesday morning.

GM said it expects to write down the value of its joint venture operations in China between $2.6 billion and $2.9 billion. Another $2.7 billion in business restructuring charges, including “plant closures and portfolio optimization,” are also expected, according to the filing.

GM, which previously announced the plan. Reorganize operations. In China, no additional details were revealed about the expected shutdown.

“As we have consistently said, we are focused on capital efficiency and cost discipline and are working with SGM to transform the business in China to remain sustainable and profitable in the market. We are close to finalizing our restructuring plan, and we expect our results in China to show year-over-year improvement in 2025,” GM said in an emailed statement.

GM said it believed the joint venture “has the potential to be restructured without a new cash investment” from the American automaker.

The majority of restructuring costs are expected to be recognized as non-cash, special item charges during the fourth quarter. That means they will affect the automaker’s net income, but not its adjusted earnings before interest and taxes — a key metric monitored by Wall Street.

GMC FFO Paul Jacobson said during a UBS conference on Wednesday that the companies are “very close to finalizing everything” regarding the chain’s restructuring. GM expects the moves to make operations “marginally profitable” by next year, without requiring additional capital, he said.

GM’s operations in China have changed. From profit engine to liability In the last decade, as competition from government-backed domestic automakers increased due to nationalism, and Generational change in consumer perceptions The automotive industry and electric vehicles are occupied.

Equity earnings from GM’s Chinese operations and joint ventures totaled more than $2 billion in 2014 and 2015.

GM’s market share in China, including its joint ventures, has fallen from about 15 percent in 2015 to 8.6 percent last year — the first time it has fallen below 9 percent since 2003. 78.5% since peaking in 2014, according to regulatory filings.

GM’s U.S.-based brands such as Buick and Chevrolet have seen sales decline more than sales from joint ventures with SAIC Motor, Wuling Motors and others. About 60 percent of its 2.1 million vehicles sold in China last year were joint venture models.

Prior to this year, the only quarterly losses for GM in China since 2009 were a $167 million loss during the first quarter of 2020 and an $87 million loss during the second quarter of 2022. was

The Detroit automaker reported. Three consecutive quarterly losses In equity earnings for its Chinese operations this year, totaled $347 million. This includes a loss of $137 million during the third quarter.

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