DETROIT (Reuters) – General Motors (GM) informed shareholders on Wednesday that it will record two non-cash charges totaling more than $5 billion (4.76 billion euros) for its joint venture in China, one related to the restructuring of the operation, the other reflecting the reduction in the value of the joint venture.
The U.S. automaker expects charges of $2.6 billion to $2.9 billion for restructuring and $2.7 billion for joint venture writedowns.
The board of directors considered that these charges were necessary “in light of the finalization of a new business forecast and certain restructuring actions” within the joint venture.
GM, however, did not specify the details of this restructuring.
The majority of the charges will be recognized in the group’s fourth quarter results and will impact net profit, but will not affect adjusted results, a spokesperson said.
Chief Executive Mary Barra has transformed the company’s operations in China, a once-profitable market that became loss-making last year.
In October, it assured investors that improvements would be visible by the end of the year, including “a significant reduction in dealer inventories and modest improvements in sales and market share.”
GM lost about $350 million in the region during the first three quarters of 2024.
On the New York Stock Exchange, GM shares were down 2.7% before opening.
(Reporting by Nora Eckert; Noémie Naudin; editing by Augustin Turpin)
Copyright © 2024 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
