GMSA will not be affected by woes abroad - Koch
June 1, 2009
Johannesburg - General Motors SA will not be affected by its US parent company's bankruptcy filing, GM African Operations President and MD Steve Koch said on Monday.
"GMSA is not part of this filing in the US and will not be affected by the measures announced today [Monday]," Koch said.
Earlier, in the day, GMSA's parent company filed for Chapter 11 bankruptcy protection in New York.
The move was seen as part of the Obama administration's scheme to slim the vehicle manufacturer to a sustainable size, giving a majority ownership stake to the federal government.
According to Koch, creditors of GM in the US would have no claims on GMSA as the South African operations had not guaranteed any US obligations.
"Nor are any of our assets used as security for their obligations. We continue to generate our own cash and are responsible for our own viability," Koch said.
He added that GMSA was a self-sustaining operation and as such would continue to operate as normal.
Koch said that since early 2008, GMSA had taken the tough but required actions to align its business in a manner which would make it globally competitive and allow it to sustain operations at present low industry levels.
GMSA, he added, was in a strong position to gain volume profitably when markets recovered.
"We have successfully stabilised our cash balance, reduced inventory levels and continue to make progress reducing our structural costs, all directed at ensuring profitable growth in South Africa."
To allay consumers' fears of buying cars from a company they think may be unable to supply parts in the future - or may completely disappear - Koch said: "GMSA Africa and our distribution partners will continue to provide full sales and aftersales backing for all our vehicles including honouring all warranties, service and maintenance plans, parts supply and all other areas of aftersales support for the Chevrolet, Isuzu, Opel, HUMMER, Saab and Cadillac brands." - Sapa
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