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'We're saddened by GM South Africa leaving, but happy about Isuzu's arrival': Business Chamber

May 18, 2017
'We're saddened by GM South Africa leaving, but happy about Isuzu's arrival': Business Chamber

The Nelson Mandela Bay Business Chamber on Thursday said that it has noted the announcement that Isuzu Motors intends to purchase General Motors South Africa (GMSA)’s manufacturing operations at Struandale, Port Elizabeth.

Read the full GM South Africa announcement here.

"The Business Chamber believes it appropriate to thank and acknowledge our longstanding partner and member company GMSA for its substantial support over the past number of years - not only for the Nelson Mandela Bay Business Chamber as an organisation, but also for our member companies and the region’s economy as a whole," said Nelson Mandela Bay Business Chamber Deputy President, MC Botha.

"Whilst we are saddened that GMSA will cease local manufacturing, we look forward to a greater understanding of the PSA Group purchase of Opel/Vauxhall.

"We welcome the news that the new Isuzu business model intends to have continued manufacturing in Nelson Mandela Bay and look forward to building on our partnership with Isuzu Motors in Nelson Mandela Bay."

Botha said that as greater details emerge of the deal, the Business Chamber expresses the sincere hope that all efforts will be made to ensure that the Isuzu acquisition of the GMSA business operations will have minimal impact on the local economy in terms of the knock-on effect on suppliers and employment in the region.

"We trust that a smooth transitional process of safe-guarding and retaining the investment and employment in Nelson Mandela Bay will be achieved throughout the remainder of the year," he said.

Trade and Industry Minister regrets GM's exit

Trade and Industry Minister, Rob Davies, responded to General Motors South Africa’s decision to exit South Africa with regret and concern for the jobs and livelihoods that will be affected.

“The Minister has learnt of the announcement by General Motors South Africa (Pty) Ltd to cease some of their operations in South Africa with regret and concern for the numerous employees whose jobs and livelihood will be directly and indirectly affected as a result,” said the Department of Trade and Industry.

In addition, the Minister noted that the decision by General Motors as part of a broader, international strategic position by the company to exit certain markets and focus the organisation on target markets and products.

This, said the Minister, is evidence through recent activities like pulling out of Europe in 2017 (Opel, Vauxhall brand sold to Peugeot SA) and the closure of a plant in Halol, India, in April 2017.

Other activities include exiting Australia, in 2013, where there was a joint venture with Holden, the closure of a plant in Indonesia in 2015, as well as recent pronouncements by General Motors CEO Mary Barra that the focus of the organisation will in future be orientated towards the development and production of autonomous vehicles, electrification and connectivity.

“It should also be noted that the emerging global geo-political dynamics might have a bearing on some business decisions being made such as the recent confirmation of additional investment in the US coupled with further move of some parts production from Mexico.”

General Motors has had a presence in South Africa since 1926, under various brands such as Buick, Chevrolet, GMC, ISUZU, Oakland, Oldsmobile and Vauxhall.... Read the Minister's full response here.

A vote of no confidence

The Democratic Alliance (DA), however, said that GM South Africa's announcement was a vote of no confidence in the current government

"According to GM, it is withdrawing because the South Africa can no longer 'provide GM with the expected returns of other global investment opportunities'," quoted Geordin Hill-Lewis MP - DA Shadow Minister of Trade and Industry.

"Following the President’s reckless midnight cabinet reshuffle, and the subsequent ratings downgrade of our economy, GM’s withdrawal is sadly just one of a growing list of foreign investors who are fast losing confidence in our struggling economy.

"GM currently employs 2 000 South Africans at its plant in Port Elizabeth, and their withdrawal will threaten the livelihoods of all of these workers."