By Lise Alves, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – Giant automaker General Motors announced on Tuesday it will invest R$10 billion in two plants in São Paulo state, after state governor, João Doria, announced tax incentives to be given by the state government to automakers that expand business in São Paulo.
“Last year we had a very serious problem, which was our factories in the state of São Paulo. We were looking for solutions that would make our factories viable,” said General Motors Mercosur President Carlos Zarlenga, during a press conference in the governor’s office to announce investment.
According Zarlenga, the funds will be used to launch new products in the São José dos Campos units in the interior of the state, and in São Caetano do Sul, located the São Paulo city metropolitan region.
Late last year, GM threatened to leave the country, stating that it was facing a ‘critical moment’ and did not intend to ‘continue to employ capital to lose money’.
The company, which already employs over 15,000 people in the state, said it intends to hire another 400 employees in the expansion process.
On May 8, Governor Doria announced the IncentivAuto program, which will deduct up to twenty-five percent of taxes for automakers and autoparts companies that submitted plans for the construction or expansion of industrial plants in amounts over R$1 billion, as well as the generation of at least 400 new jobs.
Last month Ford Motor Company announced it was closing its truck manufacturing plant in São Bernardo do Campo, located in the São Paulo city metropolitan region
“The initiative of the São Paulo (state) government was very important. IncentivAuto is a program that undoubtedly enables investments in the State of São Paulo and what we needed to make that (investment) decision,” concluded the GM executive.