The American Automotive Industry Incurred A Major Crisis

Before the Great Recession of 2009, GM owned a bevy of brands including Chevrolet, GMC, Oldsmobile, Buick, Pontiac, Cadillac, Hummer, and Saturn, including other international brands in Alpheon, Daewoo, Saab, Vauxhall, Opel, Wuling, and Holden. After the recession, bankruptcy, and federal restructuring, the GM United States offerings were left with Chevrolet, GMC, Buick, and Cadillac. GM still has the international automobile companies of Alpheon, Vauxhall, Opel, and Holden, with Daewoo now being a parts subsidiary. But the writing was on the wall as the automotive giant was losing touch with what the American public wanted. Instead of building vehicles the public wanted, GM built vehicles that they wanted to build and thought the public would buy their brand regardless (Boe, Ketler, O 'Keefe, Rubenstein, & Siverio, 2009). But as time marched on, GM became more in debt and grew to be

Think of it this way, all of the debt, problems, and poor choices made by the notoriously distinguished old GM were put on a boat (Motors Liquidation, Inc.) and given a viking burial (code 363 liquidated (sold in parts for as much profit as possible)) while every asset went to a new company convolutedly called General Motors. Basically, New GM made out like a bandit.

General Motors is faced with a dilemma. In the face of economic depression, competition from foreign players was driving down profits and the market’s preference was changing to efficient cars due to

General Motors, the “mother company” has faced many troubles in the past, and surfaced. A research by the National Research Council in the United States has revealed in 1992 that there had many impacts and future impacts in the automotive industry, indeed; it would affect the jobs and the internal economy. However, General Motors understood the threat potential that this and established strategic plans to revert the trend. Furthermore, whether General Motor Company was able to change the trend, and it saw the internal and external factors, prepared a strategic plan, Holden being the first brand in Australia, with at least just the 10 % of the population compared with the USA, the way to get a plan looks easier. In addition, it is easier to see a trend in countries with low population and good policymakers. In 2008 General Motors faced again the limit to bankruptcy. A fierce plan to develop and a new business association with FIAT made that GM avoid the dissolution. Even do all Europe have had a similar crisis( Boudette & Choudhury,

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

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

Ever since the 2008 recession US automobile companies have been on a steady downhill slide, but actually you can trace this downward trend even further back than 2008. US car companies have been feeling the heat since as early as the late 1980s when Japanese car companies laid claim to American manufacturing plants . Despite a shot in the arm in sales over the past five years, American firms are still on the decline. This case analysis aims to diagnosis the problem, provide analysis of the problem, and propose a viable solution to the problem from the perspective of the US automobile market share leader, General Motors.

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.

In 2009, General Motors (G. M) file for Chapter 11 reorganization. “The entire automotive industry was impacted by a major recession in the US and Western Europe. In 2008, the deterioration of market conditions in these regions saw GM report its lowest per-capita levels of vehicles sales in the previous 50 years. Following the issuance of the bailouts, the United States Department of Treasury required GM to strategically review its brand as well as its dealership network” (Harrison, J. S., et al, 2012). The US government granted $30.1 billion in loans, and received approximately 60% ownership stake in the new company (Harrison, J. S., et al, 2012). Following the review, GM decided that decides they will

The aim of this report is to discuss about how GENERAL MOTORS (GM) failed to perform in the previous year’s even though being one of the oldest automobile manufacturer in the history, and the issues will be clarified with pertinent theories and to conclude my analysis

After 77 years, proud and dominant General Motors was no longer known as the number one automotive manufacture worldwide. One significant contributor to GM decline was the company’s pension and postretirement benefit expenses that drove up their cost of making cars versus the cost of their foreign competitors. In 2009, right in the mist of the U.S. economic crisis GM filed bankruptcy (Welch, 2009).Prior to filing bankruptcy critics suggested that GM misrepresented their pension-related financial statements to conceal serious financial problems. In 2002, GM was facing falling stock market prices that drove down the value of their assets surrounding their pension plans and increased the company’s liabilities

In 2008 the world economy faced its most dangerous crisis since the Great Depression of the 1930s. The contagion, which began in 2007 when sky-high home prices in the United States finally turned decisively downward, spread quickly, first to the entire U.S. financial sector and then to financial markets overseas. The casualties in the United States included a) the entire investment banking industry, b) the biggest insurance company, c) the two enterprises chartered by the government to facilitate mortgage lending, d) the largest mortgage lender, e) the largest savings and loan, and f) two of the largest commercial banks. The carnage was not limited to the financial sector, however, as companies that normally rely on credit suffered heavily. The American auto industry, which pleaded for a federal bailout, found itself at the edge of an abyss. Still more ominously, banks, trusting no one to pay them back, simply stopped making the loans that most businesses need to regulate their cash flows and without which they cannot do business. Share prices plunged throughout the world—the Dow Jones Industrial Average in the U.S. lost 33.8% of its value in 2008—and by the end of the year, a deep recession had enveloped most of the globe. In December the National Bureau of Economic Research, the private group recognized as the official arbiter of such things, determined that a recession had begun in the United States in December 2007, which made this already the third longest recession in

General Motors enjoys a major market share in global automotive industry. One of its major strengths is its strong branding and market position. General Motors can be considered as one of the pioneers of modern vehicles. As per data monitor, GM had a leading share in North America and South America and in Europe it held fifth position. Similarly, it holds second position in other major segments. GM bears a strong branding. A lot of prestigious brands are provided by General Motors such as Chevrolet, GMC, Buick, Cadillac and Opal. Like Toyota, GM also has various production facilities in 31 different countries. This strong global presence allows GM to have access global markets way easily as compared to manufacturers with centralized structures. Thus, GM relies less on exports, manufactures its brands locally and is also involved in

General motors in on the of the biggest auto makers in the United States. It holds about one percent of the United States employment. The company which sold over 219,000 vehicles in November of last year only was able to sell 155,000 cars and truck to the American Public declining 41 percent compared to last year. GM car sales of 58,786 were off 44 percent and truck sales of 96,091 were down 39 percent. The steep decline in vehicle sales was largely due to a significant drop in the market’s retail demand compared with last year, and continuing economic uncertainty that has affected consumer confidence. The market shares for General Motors have always been low, but recently it has plunged to a 20 percent starting from 1980. I have

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