United States vehicle manufacturer, General Motors (GM) has announced its plans to pull out of the South African market, while Isuzu plans to take over the reins to become Isuzu Motors SA.

“The decision was not influenced by local economic-political considerations,” said Ritch Schaafsma, International Vice-President, General Motors.

“After considered assessment we determined that continued or increased investment in manufacturing in South Africa would not provide GM with the strong returns we require to support our global strategy.”

Minister of Trade and Industry Rob Davis said that the GM exit was ‘sad, but no surprise’. He said that he learned that General Motors would be leaving South Africa with ‘regret and concern’.

“Manufacturing will continue at Struandale Port Elizabeth. Isuzu Motors will be purchasing GMSA’s light commercial division and the Struandale manufacturing plant, as well as GMSA’s minority shareholding in Isuzu Truck South Africa. This will be subject to competition regulatory approval,”said Ian Nicholls, Vice president operations, GMSA.

“The next few months will see various initiatives implemented to effect these changes,” he added.”Opel, Isuzu and Chevrolet can still expect to be assisted with after sales support across all three brands with the existing dealer network and future dealer network.”

The National Union of Metal Workers of South Africa (NUMSA) claims that GM acted unilaterally and did not inform the union of the decisions.

“This is the second time that GM is pulling out of South Africa‚ and as NUMSA we smell a rat. We suspect that the shareholders got a very good deal at the expense of the workers. The company has already shut down the plant and has indicated that they will meet with us to discuss the latest developments‚ but that is after the fact‚” said Irvin Jim, General Secretary, NUMSA.

“As a result we are consulting lawyers to see what legal avenue we have in resolving this crisis. Isuzu will be taking over operations at GM‚ but we doubt that they will absorb all the workers who used to work at those plants.”

GMSA employs more than 1 000 workers, of which 500 are based in the Chevrolet division. The vast majority are members of NUMSA.

Jobs could be affected by GM’s decision to close its plant as management may end up retrenching workers; however there is also a concern of a skills loss, or at least a decrease in skills development in the transition period, whose ripple effect could be greater than the job losses at the plant.

General Motors has also noted that they will stop selling their cars in India by the end of the year.