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GM Sets Sights on Brazil Amid 'Massive Transformation'

GM Sets Sights on Brazil Amid 'Massive Transformation'

Posted by Juan Gavasa on August 15, 2014

General Motors Co. , aiming to fuel what a top executive called a "massive transformation," plans to pump nearly $3 billion into its Brazilian product portfolio over the next half decade even as it is struggling in Latin America along with many of its rivals.

The 6.5 billion Brazilian reais investment, announced Thursday by Chief Executive Mary Barra following a meeting with Brazil's President Dilma Rousseff, comes as her management team is trying to orchestrate major internal changes just a few years after GM's bankruptcy filing.

Speaking in Detroit separately Thursday, the company's product chief, Mark Reuss, said "we are reinventing the place," bringing in fresh personnel and aiming to shift focus back to its vehicle portfolio following tens of millions of recalls and tense congressional hearings.

Ms. Barra and Mr. Reuss, two career-long GM executives, have a sprawling organization to address in their overhaul. North America remains the auto giant's main profit driver, but emerging markets have long played an important role in the company's long-term plan.

Operations in China continue to strengthen, but economic malaise in Russia is a growing concern. And a bloated product portfolio and soft market conditions in India are issues executives are rushing to address.

Brazil, meanwhile, is the anchor of a Latin American operation that has delivered highs and lows in recent years. GM posted an $81 million loss in the region for the second quarter amid soft economic conditions, reflecting struggles experienced by a range of competitors including Volkswagen AG, Fiat SpA, Ford Motor Co. and PSA Peugeot Citroën.

"We have a long-term commitment with Brazil," Ms. Barra said after a visit to the presidential palace. Ms. Barra said that GM plans to invest in new products and technologies in the country.

Ms. Rousseff, with whom Ms. Barra met, is seeking a second term in the October elections and is leading the polls, but opponents are gaining ground. The death of one, Eduardo Campos, in a plane crash Wednesday upended the race, and many analysts are saying that the incident could complicate the incumbent's odds if Mr. Campos is succeeded on his Socialist Party's ticket by his more popular running mate, Marina Silva.

GM's plans for Brazil are unrelated to election results, Ms. Barra said. "We will keep investing regardless of who is the next president."

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