General Motors faces unexpected bill due to India-China tension

 

He said that it is expected to take a long time to get the approval of the Indian government for China-related deals and that although sales should still be at some point, GM has not changed its plan to start operating the plant next month .

 General Motors' delay in selling its Indian plant to Great Wall Motor is likely to result in heavy unplanned costs for the American automaker due to tensions between India and China, people familiar with the matter said.

He said that it is expected to take a long time to get the approval of the Indian government for China-related deals and that although sales should still be at some point, GM has not changed its plan to start operating the plant next month .

"By next year, it will either be a closed GM site or it will be an operating site along the Great Wall," a source said.

GM had planned to use the expected sales income of $ 250 million- $ 300 million to pay off liabilities with the exit from manufacturing in India, which another source said would be a "no profit-and-loss" situation. .

Although the money will come as soon as the deal is done, it will now have to be paid out of pocket to be paid separately, some of which would never have happened, the deal proceeded smoothly, as well as other costs - which amounted to a few hundred There may be million dollars, according to another source.

Sources also said that severance pay costs could be much higher than normal due to a lack of clarity about the prospects of the deal and greater relief to workers' demands given the low probability of finding new jobs amid the epidemic of coronavirus virus Is received.

Sources were not authorized to discuss the deal and spoke on condition of anonymity.

GM stopped selling in the world's second most populous country at the end of 2017 after years of low sales, but the factory continues to manufacture vehicles for export. Located in the western state of Maharashtra, the plant employs around 4,000 people.