Am I misreading this? See if you can catch it in the "segment" below.
Delays to General Motors' sale of its Indian plant to Great Wall Motor due to tensions between India and China are likely to result in hefty unplanned costs for the U.S. automaker.
Gaining Indian government approval for China-related deals is now expected to take quite some time and although the sale should still happen at some point, GM has not changed its plan to begin winding down the plant's operations next month.
"By next year, it will either be a closed GM site or it will be an operating site with Great Wall," said one source.
GM had planned to use the expected sale proceeds of $250 million-$300 million to pay off liabilities incurred with its exit from manufacturing in India in what a second source said would have been a "no gain-no loss" situation.
Although money will come through once the deal is done, it will now have to pay out of pocket for severance pay, some of which would never have occurred had the deal proceeded smoothly, as well as other costs -- which could amount to a couple hundred million dollars.
Sources also said severance pay costs could be much higher than usual due to lack of clarity about the deal's prospects and workers' demands for greater relief given the low chances of finding new jobs amid the coronavirus pandemic.
By paragraph, paraphrasing:
- paragraph 1: General Motors' sale of its Indian plant to China's Great Wall has been delayed
- paragraph 2: background
- paragraph 3: GM expected proceeds of $250 million to $300 million -- hold that thought
- paragraph 4: due to delay, GM will have unexpected expenses of "a couple hundred million dollars" - isn't that like $200 million? and probably more?
- paragraph 5: yes, it could be much more ...
It looks like GM might end up paying to sell this plant to China's Great Wall.
I can hear Great Wall dealmakers in the backroom joking: we're going to buy GM's plant in India and GM will pay us to buy it.
Where have we heard that before? LOL.
Maybe I'm misreading something.