General Motors, Chrysler, and Obama's Bailout Program Essay examples

The American Recovery and Reinvestmant Act, along with the Affordable Care Act, have mandated a change in the business of health care. Federal reimbursement is now based on prevention and patient outcomes. Our class web links to Centers for Medicare & Medicaid Services(CMS.gov) and Institute for Healthcare Improvement (ihi.org) have a wealth of information on how we are going to change our current health care delivery system. The president of Institute for Healthcare Improvement Pat Rutherford, has a video on how our system is going to change-It’s Art & Science. She explains that we need evidence based on research to provide the best medical care, and then customize care to each person’s values, preferences and needs. She explains that

GM agreed to give the government warrants for common stock, preferred stock, and a promise to repay the loan in 2012. GM granted that union health-care benefits would be paid to retirees in 2010; they would sell the Saab, Saturn, and Hummer divisions of their company, and reduce employment from 96,000 to 45,000 in 2012 (Arnadeo 2013). Chrysler

By November 2008, Chrysler’s sales had shrunk 25%.  GM posted losses of $18 billion, and Ford lost $11.5 billion.  Despite Ford’s elimination of 1/3 of its workforce, GM’s elimination of 30,000 jobs, and Chrysler’s cutting of 13,000 employees, the Big Three were on the brink of bankruptcy.  All three testified before both houses of congress asking for loans to avoid default. The Big Three stated their demise would trigger 3 million layoffs within a year, plunging the economy further into recession.

In the latter part of 2008, the United States’ economy was rapidly plummeting - the stock market crashed, the housing bubble burst and gas prices skyrocketed. The majority of U.S. based firms faced the reality that they would not be able to survive during such desperate economic times. The U.S. automobile industry, in particular, began to buckle under the depressed economy. The government stepped in proposing a multi-billion dollar bailout to stimulate the economy and restore economic balance. The possibility of this unprecedented government intervention was condemned by many economists. If the government helped the ailing automotive industry, this industry would have to tighten their expenditures and plan for the future to prove to

As a result of the bailout according to Reuters, “[The] U.S. Treasury's final loss on the bailout is estimated at $13.7 billion including $11.8 billion related to its investment in GM, it avoided the loss of $105.3 billion in unemployment benefit payments and the loss of personal and social insurance tax collections, according to CAR,”(Reuters). With that being said, the bailout spared an enormous amount of extra debt for the country nationally and saved many jobs as well. For these reasons, and also with my personal experience with the period and how it affected my life. I am glad that a bipartisan way to help these people came to be in the bailout of General

The climax of the 2008-2009 financial crises, the largest ever since the Great Depression of the 1930s, witnessed the near collapse of multibillion-dollar industries in the United States. Concerns over the economic impact of the possible collapse of these industries compelled the then administration and Members of Congress to seek legislative options to salvage them. Consequently, two of the industry biggest players in the auto industries, General Motors and Chrysler, were offered financial support by the government and in return, shareholders and other stakeholders had to make necessary sacrifices in order to fundamentally restructure their businesses and commit to the tough decision of returning the companies to financial viability. In

18. Why did Ford, GM and Chrysler undergo a harsh downturn relative to other car makers?

Certainly General Motor’s bailout allowed the company to identify and restructure many areas in which the company was losing money, in order to obtain success and become wealthy again (Kinicki & Williams, 2013). The four basic strategies types to reacting to an organizations uncertainty are: Becoming Defenders, Prospectors, Analyzers and Reactors. General Motors applied the first step of the four basic strategies to a degree, because they made adjustments in their existing operations, but they did not stick with what they knew how to do best, but had to restructure pretty much all of their vision and culture. The company certainly was prospectors because they focused on changing the way they conducted business, focusing more on Margin and

Founded in 1908, General Motors has been one of the largest corporation and the second largest automaker in the world coming after Toyota. For 77 consecutive years from 1931 to 1908, GM has been a leading automaker and marketer as ranked by the total number of units sold yearly. General motors have also been a leading employer not only in the United States but also in other parts of the world where it operates. However, the company has been seriously affected by the current economic crisis. The Detroit Three, led by General Motors have been a backbone of the United States economy and there eminent collapse in the current economy crisis is likely to have negative impacts on the United State’s

In March 2009, the federal government took over GM and Chrysler after the Obama administration bailed both companies out of

A government bailout is a situation in which the government offers and gives money to a business that is failing so it can prevent the consequences that can come from a business's downfall. Businesses that hire thousands of people tend to ask for these bailouts so there are not massive layoffs of their workers. This way they can continue to operate their business until their profits go back up and they are able to pay the entire bailout back. As a part of a case study I had to play the scenarios of a three different people with various backgrounds. The people had a different Ideologies regarding their views on the use of government layoffs.

General Motors has set an unimaginable goal of making $10 billion within a year after being bailed out by the federal government in just in three years. According to people who have already seen the figures, GM is likely to report 2011 net income of about $8 billion. This is GM highest net income ever. By the federal government bailing them out and helping them to regenerate their business; GM was able to shed $40 billion in obligations and most of all become debt free. “Now we are targeting our best in-class peers,” said GM’s Mr. Ammann, (Kinicki, A.,& William B., 2003) referring to South Korea’s Hyundai Motor company and Germany’s BMW AG, both of which are estimated to have had a return sake of 10% in 2011.

An important issue regarding business ethics is the theory of moral hazard which occurs when a person or business behaves differently when insulated from a certain risk. Moral hazard theory states that when a person or business is insured against the consequences of a particular event, this increases incentive for the insured to behave in a way that will cause the event (Glassman, 2009). The current government bailout of General Motors and Chrysler provides a vivid demonstration of moral hazard. In order to prevent bankruptcy, the Canadian government bought stakes in both companies totalling 14 billion dollars (Watson, 2009). Chrysler is now owned by Fiat while GM has appointed several Canadian government officials as

Forwarded here with a term paper report on “General Motors Bankruptcy” submitted by Siddharth Dixit Enrollment No A7004611108 student of

The financial crisis starting in 2008 and the following recession hit hard the US auto sector. Traditional car makers had to realise that substantial changes were needed in order to maintain their strong position in the