A couple of days after General Motors announced that it will be selling of its plants in Thailand, a Thai government official reportedly said on Wednesday that the American carmaker will be laying off all its 1,500 employees working in the facilities. The decision to lay off all the employees comes under the terms of General Motors' sale agreement with China's Great Wall Motors.
The future of the 1,500 employees were hanging since the carmaker announced its plans of winding up business from Australia and New Zealand and selling of its Thailand plants on Monday. General during it announcement on Monday had said that the company wants to exit non-profit making zones and concentrate more on North America and China markets.
Layoff to be done in phases
Per a Reuters report, quoting a government official, General Motors will start firing these 1,500 employees starting June. Per the report, the carmaker will be laying off 1,000 employees in its auto parts division in June, followed by another round of layoffs comprising 300 to 400 workers in October.
The entire process of layoff is likely to be completed by the end of this year. General Motors has two plants in the eastern industrial province of Rayong, both of which will be sold to China's Great Wall Motors. General Motors, however, is yet to comment on this.
The layoffs come as a result of sale of the factories, wherein the agreement between General Motors and Great Wall Motors is only of sales of the plants and not transfer of employees. General Motors, however, will be abiding by all the Thai labor laws and will provide severance pay to all the employees along with an additional four-month bonus.
General Motors tries to re-strategize
The American carmaker on Monday had said that it would be selling of its Thailand plants and exiting businesses in Australia and New Zealand as part of its long-term restructuring plan. General Motors has been suffering for quite some time, with operating costs ballooning in its unprofitable markets.
The restructuring process was initially announced in 2015, when the company said that it would be focusing only on its profitable markets and making investments towards driving "growth in the future of mobility," particularly in electric vehicles. On Monday the company also said that it will also be withdrawing its Chevrolet brand by end 2020. The carmaker in its first move to exit Asia announced in 2015 that it will stop manufacturing GM-branded cars in Indonesia.