By Chesney Hearst, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – General Motors will invest R$6.5 billion (US$2.8 billion) in Brazil over the next five years, Chief Executive Officer Mary Teresa Barra announced on Thursday, August 14th. The announcement was made following a meeting held in Brasília between Ms. Barra and Brazilian President Dilma Rousseff.
According to the executive, the investments will be directed towards new products, the improvement of the current models, in new technologies and the maintenance of plants. The news comes despite massive ongoing GM recalls and a downturn in the Brazilian automotive industry due to economic slowdown.
“We recognize that there are challenges in the medium and long term, but we’ve been here [in Brazil] for ninety years and will stay here for another ninety years,” Barra told reporters following her meeting with Rousseff, adding, “For us it is a very important market. Our commitment is long term.”
Barra also sited the Brazilian government’s reduction of the Tax on Industrialized Products (IPI) as a reason for the new investments. Barra said of the meeting with Rousseff; “We had the opportunity to discuss what measures can help the industry and have the opportunity, thanks to efforts such as the IPI reduction and improvement in credit conditions.”
During the meeting, Barra also reportedly expressed her condolences to President Rousseff for the recent death of Eduardo Campos. Campos, who was killed in a plane crash on Wednesday, August 13th, was the Brazilian Socialist Party (PSB) candidate for president and would have run against Rousseff in the October elections. Although Rousseff currently leads in the polls for the election, Barra stated; “We will keep investing regardless of who is the next president.”
The investments appear to be part of GM’s ongoing strategy to reinvigorate the company and secure consumer trust both at home and within emerging markets. GM filed for bankruptcy in 2009 and has seen numerous massive recalls of several of its models since Barra took over as CEO earlier this year.
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