General Motors Case Analysis

Great Essays
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
…show more content…
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
…show more content…
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

Related Documents

  • Improved Essays

    Tesla Motors Failure

    • 985 Words
    • 4 Pages

    Elon Musk, CEO and owner of Tesla Motors, Inc., and leader in electric vehicles is faced with much opposition from other competitors in the automotive industry. As the industry began to fluctuate, cost to operate in the U.S increased for production, infrastructure, technology, and manufacturing. For Musk, this became a huge problem when coming up against such large automakers. Therefore, he made the decision to manufacture his brand abroad. It was vital for this innovator to reposition the company in meeting its demands Tesla Motor Inc. has been viewed by many in the industry as a small company headed for failure.…

    • 985 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    Product-Harm Crisis Paper

    • 1125 Words
    • 5 Pages

    “Unstoppable stream of recalls tat accompanied a streak of emotionally charged accidents, including 52 deaths attributed to a sudden acceleration problem (CBS News, 2010)” (Rajasekera, 2013). Both the U.S. Government and the Japanese Government began questioning Toyota’s liabiltiy and dependability. Toyota employs stated that due to the high demand of manufacturing the automobiles, only “60 percent out of 100 percent of the vehicles were tested following completion. This could have resulted from the tetimony from President Toyoda when he said, “The company was growing too fast and that it may have focused on selling cars rather than paying suffcient attention to quality” (Rajasekera, 2013). Coorespondingly, with the growth in the Toyota manufacturing the organizaion’s personal was “stretched thin” and Toyota was required to…

    • 1125 Words
    • 5 Pages
    Great Essays
  • Improved Essays

    General Motors Turnaround

    • 1010 Words
    • 5 Pages

    And a declining revenue was not able to match the constant cost structure of the company. It made the company go into red and hence file a bankruptcy. Toyota, its main rival had been able to maintain a double digit gross margin while General Motors was not able to do so and hence faced a major setback. Company decided to reduce the no of manufacturing sites and to have less powertrain and assembly lines. This helped the company increase its productivity.…

    • 1010 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    While trying to stay true to their roots of being a direct competitor to the main competition of Ford. But by doing this Chevrolet ran into some economic difficulties which resulted in the company having to accept a public bailout. This gave many of their competitors a plethora of opportunities to become the leader in the industry. This paired with the outlandish consumer and regulatory demands, make it even more difficult for Chevrolet to raise standards while also expanding their already vast product…

    • 1199 Words
    • 5 Pages
    Improved Essays
  • Great Essays

    Being a dominate player in the auto business for over a century, Ford Motors have been reluctant to keep up with current trends and evolving competitors from growing economies. This has forced Ford to take dramatic measures by cutting jobs and closing a large numbers of its manufacturing facilities. Considering the company’s external and internal opportunities, and directing their resources towards a more skillfully R& D (research and development) department would be the first step to recovering this remarkable loss. Applying this strategy to current trends and innovating vehicles relating to them will hopefully regain our past success. Founded in the United States, Michigan in 1903, June 16th by Henry Ford and eleven investors with $28 000 as starting capital.…

    • 5345 Words
    • 22 Pages
    Great Essays
  • Improved Essays

    Case Study Tata Nano

    • 935 Words
    • 4 Pages

    A brand creates an image for a product used to attract consumers to a strong established label. Successful branding leads to sales and a positive eye by customers. Tata Motors went from the leading automobile manufacturer and the number 3 passenger vehicle brand in India to a decrease in estimated sales and a deteriorating brand. Multiple factors are taken into account with this decline including the economy, competition increasing, external factors, and the brand. Many of these factors can be tracked to make predictions on how they will affect a company but cannot be fully controlled.…

    • 935 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Volkswagen Failure Essay

    • 773 Words
    • 4 Pages

    Corporate Failure Analysis of Volkswagen This article will analyze the Volkswagen case in the viewpoint of corporate governance. As the scandal came up to the scene, Volkswagen defrauded in emission tests and make the improper cars pass from the tests in the “normal mode” rather than the “best case” scenario which also is not suitable for US emission standards. As a result, 11million cars were recalled, VW lost 20 billion dollars and especially 80 years of good reputation of the brand is suddenly collapsed. 1 This reputational loss is a big issue on which means the cost of excluding from the industry and be the one who doesn’t want to be traded with. This requires some down actions to the company like decreasing the prices,…

    • 773 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Desperate automakers, such in the recent case of Volkswagen, were caught after the carmaker illegally installed software in its diesel-power cars to evade emission standards (Farrell 2015). “The environmental challenges the automobile industry faces today are radically different from those it has confronted over the past three de- cades. These differences arise from major changes in their technological, economic, and political context, and their resolution will require a serious reexamination of the corporate and governmental institutions with which the automobile industry must interact” (Fine, Lafrance & Hillebrand, 1996). In conclusion, the American automobile industry has made significant operational improvements but it still lags in overall product development to reduce the environmental…

    • 838 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    Global Feasibility Analysis: Ford The automotive industry has been producing new models and introducing new car styles year after year. As one of the leading manufacturers in the industry, Ford Motor Company has had to confront issues of capacity utilization in each market where it operates. Capacity utilization occurs when production exceeds the number of products than can be sold in a given market. To further exacerbate the problem, a new automotive manufacturer enters the market every few years. Following recent economic problems, consumers worldwide have been tightening their spending habits.…

    • 1475 Words
    • 6 Pages
    Great Essays
  • Improved Essays

    In the late 1800s Germany and Frances created the blueprints for modern cars. “In the first half of twentieth centuries, Americans dominated the car the industry.” In the 1920, America had three big car companies as of Ford, General Motors, and Chrysler which was known as the big three. In 1913, Henry Ford had a mass production of his cars were being made on the assembly line. “The first gasoline power car was used in 1893 built by Charles and Frank Duryea.” When the roads were first build they wanted to test drive the car on the road. “The first dealership in America was W. Hare and Son Inc. in Noblesville, IN in 1847.…

    • 2617 Words
    • 11 Pages
    Improved Essays