General Motors Case Analysis

1657 Words 7 Pages
Introduction
General Motors (GM) is a Detroit based American automobiles manufacturer, and as of 2015 was the world’s 21st largest company as per Fortune 500.
GM was founded by William Durant in 1908. Pursuing the strategy of “a car for every purse and purpose”, GM made a number of innovations to the automobile in the early 20th century. Later on, environmental concerns, increased oil prices, and foreign competition, forced GM to innovate further, bringing about engines that could run on unleaded petrol, cars with air-bags, and emission reducing technologies. Despite these improvements, however, GM’s position in the US market began to weaken with the introduction of cars made in Japan and Germany.
GM underwent a series of reorganisations
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Despite this, GM kept innovating, introducing, among other things, the Chevrolet Volt concept, an electric car. However, the 2008 recession, which led to a severe credit crunch, was hard on GM which was in need of working capital. It was able to receive a loan from the government, but under the condition that it would accelerate tough restructuring measures.
The General Motors Corporation filed for bankruptcy in 2009, and a new, leaner, General Motors Company was incorporated to acquire its strongest assets. GM’s worldwide brands today include Chevrolet, Buick, GMC, Cadillac, Baojun, Holden, Isuzu, Jiefang, Opel, Vauxhall and Wuling. The scale of GM’s operations is still huge. It employs more than 200,000 people in about 400 facilities in 6 continents. In addition, GM’s distribution system consists of 21,000 dealers. As of 2015, GM’s vehicles are sold in over 100
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Its net income was $2.8 billion, which was a decline from $3.7 billion the year before. An important way to determine whether GM successfully leveraged its internal capabilities is by comparing its performance to those of its peers in the immediate auto industry as well as in the economy more generally. As can be seen from the figure below, GM has consistently underperformed indices for the auto industry as well as the larger stock market.

General Motors’ long success in the automotive industry started off with its innovative engines and cars. However, as its scale grew, it failed to leverage its internal environment and design products that offered a compelling value proposition to its customers. As a result of its HR policies towards the UAW union, GM also became highly inefficient as compared to foreign carmakers, and failed to compete with them efficiently. With the onset of the financial crisis, GM filed for bankruptcy, and a new organisation, also called GM emerged. This new GM defined its vision, mission and values as centred on the customer, with the aim of becoming the most valuable automotive company in the

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