GM expands in SA

Johannesburg - General Motors South Africa (GMSA) will next week break ground at the Coega IDZ to kick-start construction on its R250m pan-African parts distribution centre, the group said on Monday.

"Our plans remain on track to launch the all new Chevrolet Cruze later this year," said Steve Koch, president and managing director of General Motors African operations.

Koch also added that the group looked forward to working with its restructured parent company.

Responding to the announcement in the US that US Bankruptcy Court had approved the sale of substantially all of the assets of the Old GM to the New GM, a significant step in GM emerging from bankruptcy, Koch said: "While GM South Africa continues to be a self-sustaining operation, we are an integral member of the new GM and look forward to working with our much strengthened parent company."

He said that GMSA was confident that it was taking the necessary steps to position itself for the future and was particularly gratified by the June sales results, which was its strongest sales month for the year and which resulted in its market share growing to 14.55%.

On Monday the US Bankruptcy Court approved the sale of substantially all of General Motors Corporation's assets to NGMCO, Inc, an entity funded by the US Department of the Treasury.

In connection with the closing of the sale transaction, NGMCO, Inc will change its name to General Motors Company and continue to operate under GM's historic corporate and sub-brands.

The approval marks another step toward the launch of an independent new GM.

The new company will acquire GM's strongest operations and will have a competitive operating cost structure, partly as a result of recent agreements with the United Auto Workers (UAW) and Canadian Auto Workers (CAW).

The new GM will have lower leverage and a stronger balance sheet, which when combined with a lower break-even point, will allow it to reduce its risk, operate profitably at much lower volume levels, and to reinvest in the business in the key areas of advanced technology and product development.

GM's subsidiaries outside the United States will be acquired by the new company and are expected to continue to operate without interruption.

The new GM's common stock will be owned by:

• US Department of the Treasury (60.8%)
• UAW Retiree Medical Benefits Trust (17.5%)
• Canada and Ontario governments (11.7%)
• The old GM (10%)

- I-Net Bridge