General Motors has been planning on stopping the Indonesia production facility as it plans of focusing more manufacturing sport utility vehicles (SUVs). The assembly plant shutdown is likely to cause 500 job cuts. Speaking on the occasion Stefan Jacoby, GM international chief, said, “GM Indonesia is undergoing a market-driven transformation. We know this decision is disappointing for our hardworking employees in Indonesia. We will work with our teams and the local community, along with the Indonesian government, to support our people.”
Higher material costs and limited access to local parts suppliers have been a constantly rising and affecting the company operations. The company had also produced a seven-seat Chevrolet Spin that the company had hoped would be a success in the local market. But unlike expected, the Spin failed to generate adequare sales needs that help the brand gain a sustainable sales numbers.
Jacoby said to Reuters, “"We could not ramp up Spin production to boost the volume as we had expected ... although the product was really good. The logistics chain of the Spin was too complex; we had low volume so we could not localize the car accordingly, and from the cost point of view we were just not competitive.”
