MercoPress. South Atlantic News Agency

Sao Paulo state willing to support automaker GM with tax incentives

GM’s top executives attended the meeting along with union representatives and mayors of the two cities where the automaker’s Sao Paolo state plants are based

General Motors Brazil unit is in advanced talks with Sao Paulo state to receive tax incentives, the company told public officials and union representatives at a meeting on Tuesday, a few days after telling workers in a memo that it was losing money in the country.

 

GM’s top executives in South America attended the meeting along with union representatives and mayors of the two cities where the automaker’s Sao Paolo state plants are based. Two officials representing the two cities said GM disclosed the tax incentive discussions at the meeting.

“They told us that the conversation with the state is very advanced, very positive,” said Alberto Marques Filho, secretary of innovation for the city of São Jose dos Campos, where one GM plant is based and where the meeting took place.

A representative for the state government said in a statement it has “been working to show the public that it is advantageous to keep the company in Sao Paulo.” GM is the undisputed market leader for small cars and trucks in Latin America’s largest economy, but it was not revealed until recently that the automaker was losing money there.

Earlier this month, GM Chief Executive Mary Barra said the company had lowered its break-even point in the region in recent years by 40%, but it still faced “unacceptable losses that need to be addressed.”

“We’ve begun work with key local stakeholders, dealers, suppliers, unions and government officials to take all necessary actions to generate acceptable returns in the near term or to consider other options,” she added at an investor presentation on Jan. 11.

GM posted a memo in its plants in Brazil warning workers that it had experienced deep losses in the past two years and could not keep operating that way. GM, which is undergoing a global restructuring, also has announced thousands of layoffs in the United States and plans to shut two plants outside the United States which it has not yet identified.