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G.M. is expected to announce expansion in Thailand |
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The chief executive of General Motors, Rick Wagoner, arrived in Thailand on Tuesday to a decidedly brighter picture than the losses, layoffs and drawn-out overhaul his company is facing in the United States. G.M. sold 35 percent more cars last year in Asia than it did in 2005, riding the wave of Asia’s expanding markets. Its market share has also inched up. On Wednesday, Mr. Wagoner is expected to announce an expansion of G.M.’s production of small cars at its plant east of Bangkok and the construction of an engine plant for its Colorado pickup truck, said Hajime Yamamoto, Thailand director for CSM Worldwide, a Detroit-based automotive market forecasting company. This would be good news for Thailand, which has become a hub for car manufacturers serving Southeast Asia, Australia and the Middle East, and is now Asia’s third-largest car exporter after Japan and South Korea. The move would be an indication that G.M. is betting that continued growth in Asia could help ease the contraction in North America, where volume was down 20 percent in the second quarter. Asia, Europe and Latin America are now the bright spots on G.M.’s balance sheet, with the company selling more cars overseas than it does in the United States. Much of Asia remains the home turf of Toyota and other Japanese manufacturers. Although General Motors has increased its market share in Asia, by its own calculations, to nearly 7 percent from 5.9 percent in the last three years, its sales remain small compared with those in North America, where it still makes one of every five cars sold. But G.M.’s smaller stature in Asia and the lack of any legacy costs for pensions and health care have allowed the company to be more nimble in Asia. Using technology from Asian partners, G.M. is aggressively marketing itself as an environmentally aware producer of smaller, more fuel-efficient cars. In Thailand, G.M. has also benefited in the last decade from its partnership with the Japanese truck maker Isuzu, which provided engines for G.M. pickups and gave it access to suppliers. Now that the Isuzu partnership is over – G.M. divested itself of its stake in the company two years ago – G.M. will be building engines at the plant scheduled to be announced Wednesday. G.M. has kept costs down in Thailand by cutting the number of expatriate managers to about 10, from 40 earlier in the decade. It has instructed its workers to follow the Japanese formula of kaizen, or continuous improvement, and the plant uses the just-in-time production system. Entry-level workers earn a monthly wage of about 8,000 baht, or $235, at the factory, which exports cars and trucks to Australia and the Middle East in addition to Southeast Asia.
G.M. reported a cumulative loss of $10.1 billion for the first half of
the year in its North American operations. Its overseas operations, by
contrast, earned the company a profit of $1.2 billion, including
earnings of $123 million in Asia. |
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Dow Jones, New York Times, 12.08.2008 |
