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1,500 GM Staff Will Loose Jobs In Thailand After Deal With Great Wall Motors

1,500 GM Staff Will Loose Jobs In Thailand After Deal With Great Wall Motors
After the United States auto giant General Motors announced the sale of its business in Thailand earlier this week to the Chinese car maker Great Wall Motors, the company has now said that after the deal is complete it estimates that there would be about 1,500 job losses in its factory at Rayong in the country.
The deal is however making the government hopeful that the new owner will push for the production of electric vehicles in the country that could hasten the transition from the conventional internal combustion engine powered vehicles in the country – ultimately leading to less pollution in its major cities.
According to the deal between GM and Great Wall, the Chinese firm will purchase both the vehicle assembly and engine production lines of GM. Both the companies expect the deal to get completed by the end of this year.
GM currently runs its major production operations at the WHA Eastern Seaboard Industrial Estate where it has a manufacturing and assembly capacity of about 180,000 units a year. It also has a total capacity for engine production at about 120,000 units a year. The combined investment made by GM in the two facilities is about $1.4 billion.
There will not be any form of automatic transfer for the roughly 500 full-time employees in Bangkok and Rayong following the completion of the deal between the two companies, Hector Villarreal, president for Southeast Asia at GM, said in an email to the media.
"GM will provide a severance package and transition support for impacted employees," Villarreal said. "GM's severance package is greater than the labour law requires in Thailand, and includes career counselling. We are committed to looking after our people."
The current owners of the Chevrolet model in the country will continue to receive vehicle service support as well as a steady supply of spare parts as the company has pledged to honor warranties into 2020 and beyond, Villarreal said in the email. However the company did not say how long it will continue to provide vehicle services and after sale support for consumers in Thailand.
Current about 300,000 Chevrolet cars registered in Thailand.
A fair transition assistance program will be provided by the company to all of the owners of the 87 showrooms and service centres situated in Thailand locally, Villarreal said. Such offers will include a chance for them to become authorized service outlets for Chevrolet as a mark of the long standing partnerships that they have had with GM.
"Just like employees and customers, GM is committed to help the dealers transition and treat them with respect and dignity," he said.
GM's global investment priorities had spurred the company to take the latest divestment decision in Thailand, Villarreal said.
"Without the local production in Rayong, Chevrolet cannot viably compete in Thailand despite GM's imported vehicles," he said. "Although the Rayong operations used to oversee GM's exports of both cars and engines, there is no direct replacement for production in Thailand for GM."

Christopher J. Mitchell

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