Employees work on the Buick Envision SUV at the General Motors Dongyue Assembly Plant (officially known as SAIC-GM Dongyue Automobile Co., Ltd.) in Yantai, Shandong Province, China, on November 17, 2022.
Tangke|Visual China Group|Getty Images
Detroit – General Motors It is expected to reorganize its SAIC Motor Corporation The Detroit automaker racks up more than $5 billion in charges and writedowns in China disclosed in federal documents Wednesday morning.
General Motors said it expects to write down the value of its Chinese joint venture by $2.6 billion to $2.9 billion. The company also expects to pay an additional $2.7 billion in business restructuring costs, including “factory closures and portfolio optimization,” according to the filing.
GM previously announced plans Restructure operations In China, no other details were revealed about the expected closure.
“As we have always said, we are focused on capital efficiency and cost control, and have been working with SGM to turn around the China business to achieve sustainable development and profitability in the market. We are about to finalize a restructuring plan with SGM. General Motors said in a statement “We expect our performance in China to improve in 2025 compared with the same period last year,” the company said in an emailed statement.
GM said it believed the joint venture “has the ability to restructure without new cash investments from U.S. automakers.”
The majority of the $2.7 billion in restructuring costs is expected to be recognized as non-cash special items charges in the fourth quarter. That means they will impact the automaker’s net profit but not its adjusted EBIT, a key metric Wall Street monitors.
