General Motors Prepares to Close Down Bekasi Chevrolet Assembly Plant
Jakarta. General Motors Indonesia is closing its assembly plant in Bekasi, on the outskirts of Jakarta, at the end of June in a move that will lead to 500 job cuts.
GM executive vice president Stefan Jacoby said the decision was made after considering high material costs and declining supply potential as a result of limited production in the country. Jacoby also attributed the decision to the company’s plan to become more market oriented.
“The transformation will further strengthen the business structure and marketing network by focusing on the Chevrolet brands and at the same time offer competitive high quality products to cater to the needs of Indonesian customers,” Jacoby said in a press release sent to BeritaSatu.com on Thursday.
The company will continue to distribute its Orlando, Captiva and Trailblazer models through dealers in Indonesia, he added, but did not mention its best-selling Spin MPV, which is assembled at the Bekasi plant.
The closure will hit some 500 workers.
“We can understand that the decision will disappoint all employees who have shown high dedication. We will cooperate with all local stakeholders, including the Indonesian government to help our workers,” said GM Southeast Asia operations president Tim Zimmerman.
GM set up its Indonesian assembly plant in 1995, but halted operations in the country in 2005, before reviving the facility in 2013 to produce the Spin for the domestic and Southeast Asian markets. Jacoby told Reuters that GM got it wrong in going head-to-head with Japanese manufacturers in a market he dubbed their “backyard.”
GM attempted to take on Japanese rivals by locally producing its Spin, a strategic, small “people mover” van that has proved a winner in Brazil, but was too costly to make to be profitable in Indonesia as most of the parts had to be imported.
The Spin, which sells for around $12,000 and competes with Toyota’s Avanza and Honda’s Mobilio, failed to take off as GM had hoped, making the production plant at Bekasi a financial burden. Production last year was less than a quarter of the plant’s annual capacity of 40,000 vehicles.
Berita Satu, with additional reporting from Reuters
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