General Motors Case Study
General Motors
Case Study #3
Problem Summary:
One of the most serious problems that GM faces is when the firm announced a $10.6 billion loss, which was their first in 12 years. The auditors for General Motors even thought that the firm’s survival was in substantial doubt even if they received the additional $30 billion they were going to borrow from the federal government. The problems have grown as a result of mistakes by GM’s management over the last 30 years. They built up a bloated bureaucracy that supplied boring, low-quality cars for many years. GM will also lose leadership of the United States market, having already been replaced by Toyota as the world’s largest automaker. GM has been burdened with a high cost structure result of contracts that they signed in order to end a prolonged strike by the United Automobile Workers. They faced the biggest challenge in dealing with health and retirement benefits that GM had. The huge costs made it difficult to cut back on the productions of GM, even if that meant they had to rely on incentives to get the cars of the lots. They were also struggling with the sales of their lineups of passenger cars. Some people think that GM will not be able to move fast enough on their reorganization in order to become competitive again, and that they will fail in the meantime.
Analysis:
GM faces millions of dollars in losses; due to the government loans they were receiving in order to hopefully accomplish some restructuring play. The former heads such as Frederic Donner and Roger Smith were the reason that GM made mistakes, and resulted in making low quality cars. GM claimed that they thought it made sense to give in to the union’s demands since the strike was started to be very costly, which resulted of the high cost of contracts that were signed to prolong the strike. GM had increased health costs that were causing them to have to cut back on the health care and retirement benefits that they were used to getting. The firm
Case Study #3
Problem Summary:
One of the most serious problems that GM faces is when the firm announced a $10.6 billion loss, which was their first in 12 years. The auditors for General Motors even thought that the firm’s survival was in substantial doubt even if they received the additional $30 billion they were going to borrow from the federal government. The problems have grown as a result of mistakes by GM’s management over the last 30 years. They built up a bloated bureaucracy that supplied boring, low-quality cars for many years. GM will also lose leadership of the United States market, having already been replaced by Toyota as the world’s largest automaker. GM has been burdened with a high cost structure result of contracts that they signed in order to end a prolonged strike by the United Automobile Workers. They faced the biggest challenge in dealing with health and retirement benefits that GM had. The huge costs made it difficult to cut back on the productions of GM, even if that meant they had to rely on incentives to get the cars of the lots. They were also struggling with the sales of their lineups of passenger cars. Some people think that GM will not be able to move fast enough on their reorganization in order to become competitive again, and that they will fail in the meantime.
Analysis:
GM faces millions of dollars in losses; due to the government loans they were receiving in order to hopefully accomplish some restructuring play. The former heads such as Frederic Donner and Roger Smith were the reason that GM made mistakes, and resulted in making low quality cars. GM claimed that they thought it made sense to give in to the union’s demands since the strike was started to be very costly, which resulted of the high cost of contracts that were signed to prolong the strike. GM had increased health costs that were causing them to have to cut back on the health care and retirement benefits that they were used to getting. The firm