General Motors
Table of Contents
Executive Summary
General Motors (GM) is one of the big three auto makers of the world (GM, Ford, and Chrysler) and has historically been the largest and most successful. They have built some of the most famous and classic vehicles on the road which have portrayed messages of both modesty and display of class for a market of consumers who range from working class to music superstar; as Alfred P. Sloan, CEO of the 1920s put it, GM makes “a car for every purse and purpose.”
In recent years however, GM has taken an unexpected turn for the worse due to the changing economic climate that is affecting the world. Many economists argue that the US has been pushed into a recession that had started with the housing crisis of 2008. From this crisis stemmed a major banking crisis that has lead to financial institutions implementing tighter lending guidelines for business and personal consumers. This has greatly affected GM since the company, along with many other auto making companies, rely so heavily on short term returns to fund such a complicated value chain and large portfolio of brands.
Of the auto making companies facing the turmoil of falling sales and crashing returns, GM has no doubt been hit the hardest and is facing complete bankruptcy. The fact that GM has such a large portfolio is working directly against their success because of the fact that they are spread completely too thin; by being unable to focus on the core products vital to the company’s success, GM is forced to spread money it does not have around to failing brands which are only driving the company further into debt. Even with initial governmental funding, GM is still unable to find a remedy for its failing success.
GM has historically built brands around the assumption that they will be consumed whether or not they are built around consumer tastes. This lack of versatility and inability to explore long term
Executive Summary
General Motors (GM) is one of the big three auto makers of the world (GM, Ford, and Chrysler) and has historically been the largest and most successful. They have built some of the most famous and classic vehicles on the road which have portrayed messages of both modesty and display of class for a market of consumers who range from working class to music superstar; as Alfred P. Sloan, CEO of the 1920s put it, GM makes “a car for every purse and purpose.”
In recent years however, GM has taken an unexpected turn for the worse due to the changing economic climate that is affecting the world. Many economists argue that the US has been pushed into a recession that had started with the housing crisis of 2008. From this crisis stemmed a major banking crisis that has lead to financial institutions implementing tighter lending guidelines for business and personal consumers. This has greatly affected GM since the company, along with many other auto making companies, rely so heavily on short term returns to fund such a complicated value chain and large portfolio of brands.
Of the auto making companies facing the turmoil of falling sales and crashing returns, GM has no doubt been hit the hardest and is facing complete bankruptcy. The fact that GM has such a large portfolio is working directly against their success because of the fact that they are spread completely too thin; by being unable to focus on the core products vital to the company’s success, GM is forced to spread money it does not have around to failing brands which are only driving the company further into debt. Even with initial governmental funding, GM is still unable to find a remedy for its failing success.
GM has historically built brands around the assumption that they will be consumed whether or not they are built around consumer tastes. This lack of versatility and inability to explore long term
Cited: "GM Bailout May Mean Government Becomes Biggest Holder (Update3) -." Bloomberg.com. 16 Apr. 2009 PricewaterhouseCoopers. 26 Apr. 2009 . "Public Transportation in the US." IBISWorld Industry Report 27 Apr 2009: Print. world, technology and Washington area news and headlines. 16 Apr. 2009 . "United States GDP - real growth rate - Economy." Index Mundi - Country Facts