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General Motors’ Mideast Operations Remain ‘Unhurt’

DUBAI — General Motors, producer of the Cadillac, Chevrolet and Hummer brands, says its Middle Eastern operation remains unhurt despite its corporate restructuring and possible bankruptcy.

The company, also known as GM, has downsized and tapped $15.4 billion in government bailout funds in its struggle to survive.

It faces government-imposed deadline of June 1 to restructure or seek Chapter 11 bankruptcy protection.

“Restructuring our business out of court is the best alternative for the company. We are, however prepared to restructure in court, if necessary, and to restructure in a quick and efficient manner,” said Maureen Kempston Darkes, Group Vice-President and President of GM Latin America and Middle East, at the American Business Council’s luncheon on Tuesday.

She said GM would emerge from the crisis as a leaner, more focused car company with a healthy balance sheet.

“These Middle East operations are self-funded and profitable. The flow of products and services will continue in this region — and all of GM’s obligations to customers, dealers and business partners to be honoured,” she said.

GM is launching three premium vehicles, the Escalade Platinum, the Cadillac CTS-V and Cadillac SRX midsize luxury crossover in the fourth quarter.

“This is an exciting market. The passion for cars and SUVs is incredible. With more than 50 per cent of the population in the region under the age of 25, we are engaged in finding new ways to connect and work with our customers via social media and non-traditional marketing activities,” she said.

Darkes noted that GM’s dealer net work is very strong and capable of further expansion, so the company is not considering any changes in this regard.

GM registered positive growth in April in Kuwait, Iraq and Jordan, but the overall Middle East sales fell 19 per cent in the first quarter as customers struggled to secure car loans due to tighter lending restrictions at banks.

The US automaker has been working with banks in the Middle East to help consumers secure access to car loans, by assisting with down payments of up to Dh15,000 ($4,084). In the first quarter, local GM dealers launched a number of unique promotions and marketing activities to increase showroom traffic and boost new vehicle sales.

On the US restructuring plan, President GM Group said, “Repairing balance sheet and focus on four core brands — Chevrolet, Cadillac, Buick and GMC are among other key factors.”

GM has invited bidders to sale its flagship brand, Hummer, which has drawnthe interest of three bidders. Company is expected to announce sale by the end of the quarter.

However, she did not disclose the names of the bidders calling it as a matter of business confidentiality.

· aneela@khaleejtimes.com