GM's Robust Asia Operations Untouched by U.S. Bankruptcy

General Motors Corp.‘s Asian operations will be unaffected by its bankruptcy and the automaker plans to open new factories in China, Thailand and India even as it closes U.S. facilities, GM officials said Tuesday.

In China, GM is sticking with a five-year plan to double annual sales to 2 million units and roll out 30 new or updated models, said GM China president Kevin Wale. He said the China unit’s business plans are fully financed.

“Our operations are separate, they are profitable, they are well-funded, and we generate our own funds for future investment,” Wale told reporters. “We do not see any change to our growth activities.”

GM will function as usual in Asian markets, which provide opportunities for growth, said its Asia-Pacific president, Nick Reilly. He said China and India would be important to the development of small cars, which would be critical in global markets, and might manufacture for export in the future.

“In the long term, we have some of the fastest-growing markets in the region,” he said.

Detroit-based GM filed Monday in New York for Chapter 11 bankruptcy to reorganize its U.S. operations. It hopes to emerge in 60 to 90 days with fewer employees, factories and dealers. The U.S. government, which is providing GM with $50 billion, will be its majority shareholder.

GM’s presence in Asia reaches back decades and its brands are pop culture icons. Kings, presidents, beauty queens and movie stars ride in Cadillac limousines. In Australia, a 1970s singer called himself Frankie J. Holden after an early model made by GM’s Holden Ltd. subsidiary.

China is especially important for GM, which is one of the country’s top automakers and has eight joint ventures with local partners.

Strong sales in China have been a rare bright spot for global producers as demand elsewhere plummets. China’s monthly sales have surpassed those of the United States so far this year.

GM China’s sales in the first five months of the year rose 33 percent from the same period of 2008 to 670,000 vehicles, Wale said. He said May sales surged 75 percent from a year earlier to 156,000 units.

Demand is so strong that GM China expects to add a factory within five years but has made no decisions about a location or other details, Wale said.

In Thailand, GM said it will press ahead with a $445 million plan to expand its manufacturing base by building a new factory and upgrading another even as it expects vehicle production to plunge by nearly two-thirds this year.

“Our plans for continued growth remain on track,” GM’s general manager for Southeast Asia, Steve Carlisle, said in Bangkok. “We will also continue to play our role in building Thailand as the hub of the automotive industry” in Southeast Asia.

GM’s regional units are blocked from tapping the financial support being given to the parent company. But Carlisle said the Southeast Asia arm is talking with Thai banks about financing and its chances of getting loans are “quite high.”

In India, GM is trying to line up financing for an engine factory, Reilly said, without giving details. GM announced plans in August for the plant near Pune.

Holden, which makes Australia’s most popular car, the Commodore, has independent financing and expects no job losses in its 6,000-strong workforce, chairman Mark Reuss said.

“We’re in a good place,” Reuss told Nine Network television.

GM China should be unaffected by GM’s agreement to sell most of its European subsidiary Opel, Wale said. Several models sold in China are based on Opel vehicles or share parts, but he said the companies would continue to cooperate under new ownership.

“The technology for the vehicles we sell is held by General Motors, and I don’t see any implications from the new structure in Europe,” he said. “We intend to continue to share product knowledge and product capability.”

General Motors has an Asian regional product-development center and an alternative-fuel research center in Shanghai, the center of the country’s auto industry.

GM has no immediate plans to export Chinese-made vehicles to the United States, Wale said.

“The focus right now is to increase production in the U.S., not outsource it to the rest of the world,” he said. “At some stage in the future, there is no doubt that we will expand, with some exports, but I do not see that happening in the foreseeable future.”

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AP Business Writers Yuri Kageyama in Tokyo and Stephen Wright in Bangkok and Associated Press Writer Rod McGuirk in Canberra contributed to this report.

6/2/2009 5:00 AM JOE McDONALD AP Business Writer BEIJING