GM LatAm divisions untouched by bankruptcy

This week’s bankruptcy filing by auto giant General Motors (GM) sent shockwaves throughout the U.S. economy. Yet the troubled automaker’s Latin American divisions may weather the storm.

Despite the troubles GM has had in the U.S., its auto sales in Latin America have gone well such as the 10% increase in Brazil last year. Therefore, GM will not sell off its branches in Brazil and Argentina and may expand its operations there:

“There are no plans to sell GM operations in Brazil, or anywhere else in Latin America, Africa and the Middle East," said Jaime Ardila, the chief executive officer of General Motors do Brasil Ltda. and chief financial officer of GM's Latin America, Africa and Middle East division, or GM LAAM.

After months of uncertainty, the Detroit automaker sold a majority stake to the U.S. government in order to keep itself in business. Its LAAM division is one of its most profitable. GM LAAM, of which Brazil is the largest subsidiary, saw 2008 sales rise around 3% compared with a 20% decline in GM's North American car sales…

"We had a great 2008 and will have a lucrative 2009," Ardila said.

In terms of Brazil, GM has $2.5 billion invested there through 2012 with at least $1.5 billion of that secured. (The other $1 billion is expected to soon be financed partly via local banks).

Despite decreased sales in Argentina, a statement by GM Argentina said that the division “is economically and financially solvent thanks to our healthy balance in the region.” Additionally, the Argentine government is expected to soon provide some $55 million with the goal of developing a new car line for GM.

Image- BBC News (“Chevrolet's Brazilian range consists mainly of re-badged Opel models.”)
Online Sources- WSJ, CNNMoney.com, AP, New York Times