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GM to Pull Out of South Africa : Cites Losses, Unwillingness of Regime to Dismantle Apartheid

October 21, 1986|JAMES RISEN | Times Staff Writer

Nonetheless, GM's decision to withdraw clearly signals defeat for its policy of working for change from within. "This is extremely significant because GM has headed up the effort to stave off the divestment movement and argued most strongly that they could do the most by staying," Davis said.

In South Africa Since 1926

GM, which has operated in South Africa since 1926, said it is now negotiating with a newly formed group of its South African managers for the purchase of its Port Elizabeth assembly complex for an undisclosed price. A GM spokesman said he does not know whether any of the company's black managers are involved in the buyout talks. GM currently employs about 2,800 workers, 60% of whom are nonwhite, in Port Elizabeth, South Africa's auto-making center and a stronghold of labor unrest on the country's southern coast.

While political pressure to pull out has been growing, the economic incentives for GM to write off its investment in South Africa have also been mounting. With the South African economy in a tailspin, car and truck sales have been plunging over the last few years, making it increasingly difficult for GM to justify remaining in the country.

GM's sales fell more than 20% in 1985 to just 35,000 units; so far this year, its sales are off another 12%. The layoffs that have resulted have cut employment from the 1981 peak of more than 5,000 to the current 2,800, reducing GM to the second-largest American employer in the country behind Mobil.

Will Remain a Supplier

GM's withdrawal may not be total. Company spokesman George Schreck said GM's West German subsidiary, Adam Opel AG, and its Japanese affiliates, Isuzu Motors Ltd. and Suzuki Motor Co., will continue to supply key components to the new South African company that takes over GM's operations.

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