Thailand Turns Down GM

GM ThailandAfter soaking the U.S. government, and ultimately the American tax payer, for 13.4 billion dollars in bailout monies GM decided to try the same tactic with the Thai government and failed.

GM Has been working towards opening a new diesel engine/pick up truck plant in Thailand at a cost of 445 million dollars. Construction on the new plant stopped three months ago due to the downturn in the global economy and they have been seeking aid since.  The loan guarantees GM was seeking from the Thai government and financial institutions was reported to be in the amount of 145 million dollars to prevent delays in bringing the new plant online by 2010.

GM’s tactic of playing to the fears of potential job losses didn’t pan out for them like it did in America. This week Thailand’s Industry Minister said the request would be declined stating “it’s not the responsibility of the state”  and further adding that GM should get it’s financial house in order by rewriting their financial plan. Thailand’s new Prime Minister, Abhisit Vejjajiva,  echoed those sentiments adding  “Our plan at the moment is not to provide specific assistance to individual companies.”

If only The U.S. government had the balls to do the same thing. The American consumer didn’t buy into the big 3 bailout in the automotive industry and they still don’t. GM is the largest car manufacturer in the world and more to the point the worst run business in the world. Being behind the curve in car technology over the last two decades is just the tip of this iceberg. GM as well as the other big auto makers in America are floundering now due to inept business strategies implemented decades ago. They refuse to change and now want to waddle up to government troughs world wide for help.

Thailand has become the Detroit of the East employing over 300,000 people in an automotive industry where every major manufacturer is represented. The big seller in South East Asia is the one ton pick up truck and unfortunately for the manufacturers the market is now severely saturated.

As much as GM wants the market in Thailand and South East Asia to continue they are already way behind the curve trying to build even more trucks for an over saturated market. While a new plant would mean more jobs and a boost to the local economy it’s not a very good bargaining chip when your companies business model hasn’t changed in decades and you refuse to acknowledge that major restructuring needs to take place. Thailand got this one right, GM needs to sink or swim on it’s own.

sig1 Thailand Turns Down GM

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Comment by MikeNo Gravatar
2009-02-07 00:35:51

Talen I totally agree particularly about the US government, I know they are not to blame for all the worlds woes, but they must shoulder some responsibility.

I hope the stand by Thailand doesn’t backfire with job losses though.

Mikes last blog post..Coconut Surprise.

Comment by TalenNo Gravatar
2009-02-08 05:15:27

Unfortunately I think there will be job losses in Thailand but GM using that as a bargaining tool is just bullshit.

As for America…We allowed the derivatives to come into play and no one, not even the financial wizards, knew how badly it would be abused. It’s sad when the old head of the federal reserve ( Greenspan ) had the audacity to say he knew there was a potential for problems but didn’t think the banking institutions would abuse the market.

The U.S. government holds a large share of the blame but the rest of the world joined in on the greed fest…now we get to pay for it.

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