GM Plans $2.7 Billion Expansion in Brazil

General Motors Co. says it will invest 10 billion reais ($2.7 billion) to expand two factories in Sao Paulo, Brazil, over the next five years.

The scheme ends GM’s threat to close both factories, which employ a combined 15,000 people. It also confirms a local media report in February that said GM was poised to invest 9 billion reais in its Sao Jose dos Campos and Sao Caetano do Sul plants in exchange for tax breaks.

At the time, the state said it would be willing to refund a portion of taxes collected, assuming that the GM investment would lead to greater car sales in Brazil. The two plants currently produce Chevrolet Blazer SUVs, S10 small pickups, Cobalt and Onix small cars, Spin mini-MPVs and Montana front-drive pickups.

GM’s factories posted an operating loss of 1 billion reais ($273 million) last year, according to Valor Economico, the country’s largest financial newspaper.