General Motors (GM) announced a $5 billion non-cash charge tied to its struggling China joint venture, as the automaker battles mounting losses in the world’s largest auto market.
The charges include $2.6-$2.9 billion for restructuring, including plant closures, and $2.7 billion for reduced joint-venture value.
Once a key profit hub, GM’s China operations now face stiff competition from domestic manufacturers buoyed by government subsidies. Sales at SAIC-GM plunged 59% this year, while local EV leader BYD outpaced it tenfold.
CFO Paul Jacobson expressed optimism, noting the restructuring’s final stages aim to restore profitability in 2025 without extra funding. Critics remain skeptical, citing a challenging market outlook.
CEO Mary Barra continues GM’s China overhaul, but some analysts question the viability of competing in an “untenable” market.
