Internationalization of General Motors
Internationalization of General Motors
This paper examines the expansion of General Motors overseas in its various phases, as well as triggers for internationalization and the problems faced during the process. The paper also considers what benefits have been achieved through international growth, and how the company can be classified with regards to Bartlett and Ghosal’s 4 typologies. Finally, the paper discusses the concept of a “world car,” meeting the demands of customers across the globe.
General Motors, International; Internationalization; Globalization; Multinational; Growth Strategy; Volkswagen; Bartlett; Ghosal
1. Internationalization of GM
1.1 Early History
In the early 1900’s, the first companies that would form the company as we know it today began to emerge. The first of these was the Olds Motor Vehicle Company (later Olds Motor Works, makers of the Oldsmobile) in 1897, followed by Cadillac Automobile Company in 1902 and Buick Motor Company in 1903.
Under the leadership of William Durant, September 16th 1908 marked the birth of the General Motors Company, initially incorporating the Buick Motor Company. GM then purchased Olds Motor Works in November 1908, a 50% stake in the Oakland Motor Car Co (later Pontiac Motors) in January 1909, and Cadillac in July 1909. During its first few years of operation, GM also acquired a number of parts and accessories manufacturers, such as Champion Ignition Company (predecessor of AC Spark Plug) and Fisher Body Company, and also attempted to purchase Ford Motor Co. but were refused a $9.5 million loan from their bankers (GM.com Corporate History).
In 1911, however, as a result of the outstanding debts that the company had acquired, bankers stepped in and removed Durant from the management of General Motors. Durant retained his shares, helped set up the Chevrolet Motor Company and bought back the company, fusing the two companies into the General Motors Corporation on October 13th, 1916
This paper examines the expansion of General Motors overseas in its various phases, as well as triggers for internationalization and the problems faced during the process. The paper also considers what benefits have been achieved through international growth, and how the company can be classified with regards to Bartlett and Ghosal’s 4 typologies. Finally, the paper discusses the concept of a “world car,” meeting the demands of customers across the globe.
General Motors, International; Internationalization; Globalization; Multinational; Growth Strategy; Volkswagen; Bartlett; Ghosal
1. Internationalization of GM
1.1 Early History
In the early 1900’s, the first companies that would form the company as we know it today began to emerge. The first of these was the Olds Motor Vehicle Company (later Olds Motor Works, makers of the Oldsmobile) in 1897, followed by Cadillac Automobile Company in 1902 and Buick Motor Company in 1903.
Under the leadership of William Durant, September 16th 1908 marked the birth of the General Motors Company, initially incorporating the Buick Motor Company. GM then purchased Olds Motor Works in November 1908, a 50% stake in the Oakland Motor Car Co (later Pontiac Motors) in January 1909, and Cadillac in July 1909. During its first few years of operation, GM also acquired a number of parts and accessories manufacturers, such as Champion Ignition Company (predecessor of AC Spark Plug) and Fisher Body Company, and also attempted to purchase Ford Motor Co. but were refused a $9.5 million loan from their bankers (GM.com Corporate History).
In 1911, however, as a result of the outstanding debts that the company had acquired, bankers stepped in and removed Durant from the management of General Motors. Durant retained his shares, helped set up the Chevrolet Motor Company and bought back the company, fusing the two companies into the General Motors Corporation on October 13th, 1916
References: BBC, 2007. “Toyota ‘Worlds Largest Carmaker” BBC News [online] Available from: Beaverstock, J. 2004. “Managing Across Borders” ” Journal of Economic Geography; issue 4, pp. 157-179; Oxford University Press : Oxford [referenced 7 May 2007] Bordenave, G., Lung, Y. 2002. “Internationalisation of GM” Institut fédératif de recherches sur les dynamiques économiques ; Université Montesquieu Bordeaux IV : Pessac [referenced 7 May 2007] Bradsher, K., 2006. “GM’s Global Strategy (Driven By Asia)” International Herald Tribune [online] Available from: Condon, P., 2004. “Comparing Sprawl in US and Canadian Cities” The Planning and Development Network [online] Available from: GM.com, 2007. Annual Report 2006 [online] http://www.gm.com/company/investor_information/docs/fin_data/gm06ar/index.html [cited 7 May 2007] GM.com, 2007. Corporate History [online] http://www.gm.com/company/corp_info/history/ [cited 7 May 2007] Vassallo, J., Fagan, F., 2005