General Motors Bailout

Setting their goal high on making more than $10 billion a year, the General Motors Co. had to be bailed out by the federal government (Kinicki & Williams, 2013). In 2011, the GM made the highest profit a year reporting on Feb. 16, 2012, of making about $8 billion, this is almost twice as much as, in 2010. With the growth in China and profits in North America, $4.7 billion of the strong profit was from them. This gave them the opportunity to “shed billions of dollars of costs and raise prices higher on their products” (Kinicki & Williams, 2013, 150).
Because of the bailout, General Motors was able to eliminate all debt and shed nearly $40 billion in obligations. This bailout made them different from Ford Motors Co. who still has to pay off the …show more content…
South America is having some loss due to outdated products, this is causing a loss in sales (Kinicki & Williams, 2013, 150). In Europe, they are having a problem with the labor costs causing the loss of money for more than a decade (Kinicki & Williams, 2013, 150). This could develop a hard year for GM in 2012 for the home markets because Toyota and Honda Motor Co. are now back to production after the devastating shortage in Japanese due to the earthquake and tsunami (Kinicki & Williams, 2013, 150). One of the goals that may help GM is to cut out “platforms” and build more vehicles throughout the world, using the same parts, assembled in plants and using the same tooling. This will help them to cut cost and boost sales. Hoping to cut the total of auto platforms down by 2018 to a total of 14, just as Volkswagen and Ford who rely on five common platforms to deliver their sales 75 percent before the end of the decade. GM is planning on cutting their incentives, due to being the only one who is going to show a loss in sales. GM is just focusing on the profit and not the “numbers on the board.” (Kinicki & Williams, 2013,