GM China Has Money But Will Not Pay debts of U.S. Parent(Huh?)

Shanghai, June 4, 2009: (Gasgoo.com) After General Motors filed for bankruptcy on June 1, Kevin Wale, president of GM China, said GM's operations in China will go ahead as usual. He noted that GM China is financially self-sufficient and won't have to pay debts of its parent in the U.S., Chinese media reported.

Its bankruptcy filing showed that GM listed $82.3 billion in assets and $172.8 billion in debts. The U.S. government plans to invest $30 billion in restructuring the American auto giant and will hold 60% stake in the 'New GM'. In the U.S., GM will close 12 plants and three warehouses, leaving about 120,000 people out of work.

Kevin Wale is doing all he can to distance GM China from the woes of its parent company. Earlier this week, he told Chinese media that GM's China operations are financially self-sufficient, won't require financing from Detroit, and are not expected to pay debts of its U.S. parent. GM China will use its profits for expansion in China.

GM's China operations remain unaffected and targets unchanged, such as to double the domestic sales over the next five years to over 2 million units, with more than 30 new or upgraded models to be launched, and to form a joint venture with FAW Group for making commercial vehicles.

In the future, GM China will become part of the 'New GM' and continue to ride on the strength of the Chinese auto market. According to GM, China has been the world's largest vehicle market in the world during the first five months of 2009.

"Domestic sales of vehicles by GM China and our joint ventures continue to be strong, rising 33.8% year on year [to 671,148 units] in the first five months," Wale said. "We intend to remain an industry leader in China."

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