General Motors To Cease Auto Manufacturing in Colombia & Ecuador

US automaker General Motors (GM.N) has announced its decision to discontinue manufacturing operations in Colombia and Ecuador. In a statement released last Friday, the company revealed that it will cease production at its Colmotores plant in Colombia immediately, and at its Ecuador facility by the end of August.

The decision impacts 850 workers in Colombia, for whom GM is currently seeking approval from the country’s labor ministry to proceed with layoffs. GM noted that its Colombia plant was operating at just 9% capacity, while its Ecuador plant was running at 13% capacity.

Colombia’s labor ministry will conduct a series of inspections at the plant to safeguard workers’ rights, the ministry said in a statement.

“For the Ministry of Labor and as the National Government we are committed to the defense of labor rights, for this reason I have given the instruction to the Directorate of Inspection, Surveillance and Control, to carry out a series of visits to the plant to inspect working conditions. and verify that the standards required by law are met,” said Minister of Labor, Gloria Inés Ramírez Ríos.

The plant closures come against a backdrop of a 14-year low in new vehicle sales in Colombia, as reported by industry groups earlier this year. With a dollarized economy, Ecuador does not benefit from a cheap local currency, while in Colombia, weak consumption and uncertainty around Gustavo Petro’s proposed labor, pension and health reforms have put brakes on consumer spending and new foreign investment.

Despite the manufacturing shutdowns, General Motors plans to maintain a presence in both Colombia and Ecuador through its network of dealerships, and insists it will continue to sell vehicles in the Andean nations.