General Motors Co has warned employees in Brazil that new investments there depend on a painful plan to return to profit in the country, according to a memo seen by Reuters on Saturday. In a message posted at Brazilian plants, GM's top executive in Brazil and Argentina, Carlos Zarlenga, said after running up a heavy loss over the past three years the operation had reached "a critical moment that will require sacrifices from everyone."
The memo referenced comments that Chief Executive Mary Barra made during investor presentations last week about challenges in South America. "We are not going to keep deploying capital to lose money," she said, in a quote repeated by Zarlenga.
GM spokesmen in Brazil did not immediately comment on the memo, which was first reported by newspaper O Estado de S.Paulo. The dire tone came as a shock to some workers in Brazil, where GM has overtaken Volkswagen AG and Fiat Chrysler Automobiles NV to become the industry sales leader as the economy rebounds slowly from a deep slump.
In April 2018, Zarlenga touted a new family of low-cost cars hitting Brazilian dealerships this year as he played up progress in an interview with Reuters.