American automaker’s subsidiary, General Motors East Afr ica (GMEA), has shrugged off threats by its parent firm to file for bankruptcy u n der the American laws following its fallout with its lenders, saying it would be business as usual.
GMEA Managing Director Bill Lay said on Thursday that its operations in East Afr ica remained on rock-solid footing despite efforts by its parent firm to survive
the turbulent times, including the option of filing for bankruptcy as early as n e xt Monday.
The parent firm, GM, signaled plans to file for bankruptcy after talks with debt ors, including holders of bonds failed to yield any positive results.
The bond holders rejected a counter plan to own stakes in the firm as payback fo r the funds owed to them.
Lay said the GM operations in East Africa remained profitable and the news of po ssible bankruptcy by its parent firm could not affect its operations negatively.
“It would be business as usual,” Lay was reported to have said in a statement is sued by the firm’s publicists in Nairobi Thursday following the failed negotiati o ns between GM and its debtors in the US on Wednesday, which left all options ope n for bankruptcy.
GM is one of the biggest suppliers of vehicles around the East African region, c overing more than eleven countries in total.
The firm has a car assembly plant in Nairobi, through which it distributes brand s across the region, though its market dominance has lately been affected by the
surge in the number of second-hand Japanese car imports.
GMEA has invested more than Ksh2 billion (US$ 26 million) in expanding its produ ct range and improving customer service and plans to continue with its expansion
programme despite the difficulties facing its parent firm, Lay said.
He said GMEA is a self-funded operation and enjoys a substantial market share in the East African region.
The firm has tried to survive through hard times since the opening of the auto-m arkets and the opening of the free port in the United Arabs Emirates (UAE), whic h is credited with the influx of cheaper second-hand and reconditioned vehicles i n East Africa.
The firm lobbied to have the governments in East Africa to block the import of c ars older than eight years as a way of encouraging domestic assemblies.
The East African Community (EAC) states, including Burundi, Kenya, Rwanda, Ugand a and Tanzania, GMEA’s key markets, are yet to settle on a regional standard for
auto imports, but Kenya is lobbying for its ban on cars older than eight years t o stay in force.
Lay assured all stakeholders in GMEA that the company is profitable and expresse d continued optimism about its growth in East Africa.
He said the firm’s customers had been affected by the news of a possible bankrup tcy and assured them business would not be interrupted.