Tuesday, June 2, 2009

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GM India not to lay off employees

General Motors India (GMI) has said no employee working for its Indian operations will be retrenched even as globally the company gears to file for bankruptcy on Monday.

The company said it will continue to hire in India as scheduled, as last year it recorded a sales growth of over 9 per cent. Over 4,000 people are directly employed at GM’s operations at Halol, Talegaon, Bangalore and Gurgaon, and plans to hire close to 900 workers this year.

GM India, on Monday in a statement, said the GM India operations are not included in the US filing for Chapter 11. “Our dealers will continue to receive all our carlines, while our suppliers will continue to work with us to supply parts and components for our cars. We have no intention to modify our product, brand or other business plans including new product launches,” said Karl Slym, president and managing director, GMI.

“We can’t afford to slow down operations in a country like India where we sold 65,000 cars last year,” said P Balendran, VP, GMI. When the industry registered a negative growth (-2 per cent) in 2008, GM had registered a growth of over 9.4 per cent.

Hence the company is keen to fortify its employee base especially at its production facilities.

The company has decided to also launch two more cars this year — sedan Cruze (Rs 12-14 lakh), and a new small car (Rs 4-5 lakh). “This is in addition to LPG and CNG options in some of the existing models,” said Balendran. But dealers are worried sick whether the bankruptcy filing will affect sales in the short to medium term. “I surely expect sales to dip soon after the filing,” said a dealer in Bangalore.

An automobile analyst who did not wish to be identified said GM will struggle to increase its market share in India in the present scenario. GM has a 4 per cent share of the Indian market at present. “The company had plans to capture more than 10 per cent of the market by year 2015. Now, that looks difficult. I foresee Honda and Toyota stepping up the gas,” the analyst said.

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