Preview

Planning for the Chevy Volt Case

Good Essays
Open Document
Open Document
1002 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Planning for the Chevy Volt Case
Planning for the Chevy Volt Case

General Motors is a company in deep trouble. As car sales in North America collapsed in 2008, GM, which had already lost money in 2007, plunged deeply into the red. With losses estimated at $14 billion, the company was forced to go cap in hand to the government to beg for public finds to help it stave off bankruptcy. Fearing the economic consequences of a collapse of GM, the government agreed to loan funds to GM, but it insisted that the company have a clear plan charting its way back to profitability. Ironically, such a plan was already in place at GM. At the heart of it was a potentially huge gamble on a new type of car: the Chevy Volt.
The Chevy Volt, which is scheduled for market introduction in 2010, is a compact, four-door electric car with a reserve gasoline-powered engine. The primary power source is a large lithium ion battery (lithium ion batteries are typically found in small electric appliances such as cell phones). The battery can be charged by plugging it into a wall socket for six hours; when fully charged, it will fuel the car for 40 miles, which is less than most people’s daily commute. After that, a gasoline engine kicks in, providing both drive power and recharging the lithium ion battery. GM estimates fuel economy will be over100 miles per gallon, and charging the car overnight from a power outlet would cost about 80% less than filling it with gas at $3 per gallon. The car will cost somewhere between $30,000 and $40,000; however, because it uses a battery-powered technology, buyers will be able to take $7,500 tax credit.
The Volt was the brainchild of two men, Bob Lutz, GM’s vice chairman, and Larry Burns, the head of R&D and strategic planning at GM. Although Lutz in particular had always championed large gas-hungry muscle cars, GM’s planning told them that the market would probably move away from the SUVs that had been a profitable staple at GM foremost of the 1990s. A number of trends were

You May Also Find These Documents Helpful

  • Good Essays

    Why GM Matters is a book written about the history of General Motors Company and the struggle they endured during the 2008 economic recession. The book is broken into three parts; the first part explains what went wrong with General Motors Company including the workers that would be affected if General Motors Company had to move their production to another country or if they had to close the doors on General Motors Company and let Toyota buy them out. The book also discusses in the first part, the person most people consider responsible for their struggle throughout the recession, Rick Wagoner. The author in the first part conducted many interviews with General Motors Company employees such as, works that worked in the production plant, workers that handled the finances, but most notably, Rick Wagoner. The majority of the first part is about the history of General Motors Company and the consequences that would occur if General Motors was bought out by Toyota.…

    • 1197 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Imagine this ----- GM, FORD AND CHRYSLER – The three pioneer automakers of U.S going bankrupt!…

    • 516 Words
    • 3 Pages
    Good Essays
  • Best Essays

    Gm Volt Essay

    • 3721 Words
    • 15 Pages

    The sale price of the Chevy Volt is $39,000 plus qualified buyers can take advantage of a tax credit or buy the car through a lease program.…

    • 3721 Words
    • 15 Pages
    Best Essays
  • Good Essays

    GM’s vision and main focus is to achieve a healthier margin and profit. Although this vision may not be very easy to attain, is a very realistic one. In spite of the fact that it seemed to be a “once-unthinkable” goal, GM reported its highest-ever net income of about $8 billion in 2011. This was a massive increase from the previous year’s net income of $4.7 billion, and was in accordance with its vision of achieving higher profit. A short while after that, GM also released figures of its global sales, which showed its reclaim of the ‘world's largest auto maker’ title from its rival, Toyota. Based on these facts, I…

    • 1039 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Mktg Case

    • 496 Words
    • 2 Pages

    The U.S. electric passenger car industry in 2011 was described as being in its infancy, because it is still a new concept to buyers. However there are signs of growth from 2011-2015. Buyers do not consider the car because of price, travel range and vehicle size, along with other secondary concerns.…

    • 496 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Eco 550

    • 2765 Words
    • 12 Pages

    For this assignment, General Motors is the automobile company that will be reviewed and researched in detail. In the year 1908 William Durant, who was already known as a leader in this industry for horse drawn vehicles, founded General Motors. "At its inception GM held only the Buick Motor Company, but in a matter of years would acquire more than 20 companies including Oldsmobile, Cadillac, and Oakland, today known as Pontiac" (General Motors, 2012). In this paper GM 's income statement will be reviewed to figure out the following calculations: the number of cars sold each quarter, the elasticities, marginal cost, variable cost, and fixed costs. After figuring out these calculations, there will be a clear answer to what the future options are for General Motors if they decide to expand.…

    • 2765 Words
    • 12 Pages
    Powerful Essays
  • Good Essays

    In the fall of 2008, General Motors, Ford and Chrysler-known for decades as the Big Three encountered a very serious automotive industry crisis that they haven’t met before. This unprecedented crisis made these three leading companies in automotive industry step at the edge of bankruptcy. Facing this critical problem, automotive companies can not deal with this severe difficult situation all by themselves then they turn to the United States Federal Government for help not only once but several times. According to a report published by Center for Automotive Research in the United States, the United States Federal Government successfully avoids a lose of 28.6 billion dollars by offering assistance to automotive manufacturers in this crisis. Even though this amount of money can not be comparable with the tremendous amount of money the United States Federal Government loaned to the automotive industries, it does demonstrate that the government has done something really helpful and successful in term of the outcome of this action and the federal government’s functions in some extent. Therefore, as far as I am concerned, the United States Federal Government should have assisted the automotive manufacturers from going bankrupt. Then I will illustrate my reasons to support my opinion in the following statement.…

    • 908 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Mitt Romney, the republican governor of Massachusetts, wrote an article in 2008 when the auto industry was on the verge of collapse called “Let Detroit Go Bankrupt”, the article was about his thoughts on how the impending doom of the auto industry in Detroit should be handled. He expressed that Detroit should not be bailed out by the federal government because that would allow the practices that brought GM and Chrysler to their knees to continue, instead let the GM and Chrysler file for bankruptcy, restructure and emerge better company’s. By filing for bankruptcy his idea was that the industry would shed expensive labor agreements, reduce retiree benefits and allow Detroit to be on par with foreign brands in terms of pay and benefits, which would in turn allow them to compete. He also blamed bad management and expressed that the current management at these companies must be replaced.…

    • 491 Words
    • 2 Pages
    Good Essays
  • Good Essays

    A nation of drivers were home bound to start in 1942 with the beginning of the United States involvement in WWII. Automobile production was halted that year as manufacturers geared up to make airplane, trucks and tanks and whatever else was needed for the war effort. It wasn't until the 1950s that the big three auto makers, GM, Ford and Chrysler began to reinvent the automobile. The 1949, 1950, 1951, 1953 and 1954 Chevrolets received only modest facelifts and were called dull but dependable. However, in 1955, 1956 and 1957 appearance and engineering was changed radically by Chevrolet. Who was responsible for the new Chevy's? Chuck Jordon, Harley Earl and especially Edward Nicholas Cole, Chevrolet's Chief Engineer.…

    • 406 Words
    • 2 Pages
    Good Essays
  • Best Essays

    Saturn Car Case Review

    • 2445 Words
    • 10 Pages

    As the competition for car manufacturers was growing, the steady decline as a leader in the small & mid size cars woke up General Motors to do something to stay ahead in the market place. In early 1980s, Alex C. Mair, and two other senior engineers discussed a new and small innovative car project. It was from that idea the Saturn automobile was born.…

    • 2445 Words
    • 10 Pages
    Best Essays
  • Better Essays

    General Motors and Risk

    • 2232 Words
    • 9 Pages

    Even though GM has filed for a Chapter 11 bankruptcy few years ago, it is today an active organization in the world. General Motors operates in 70 countries and have presence in over 200 countries (“GM Careers”, 2012). Evidentially the spread of General Motor’s operations makes it susceptible to numerous risks within the global market, where General Motors will have to anticipate and produce solutions to risks. Solutions are created through various arbitrage techniques and with intense market research that takes into account current and historical data; and as a result they are utilized to…

    • 2232 Words
    • 9 Pages
    Better Essays
  • Powerful Essays

    This film is targeted towards GM shareholders, those who are interested in electric vehicles, or have questions or concerns about global warming, dependence on foreign oil, air pollution or the environment, so Paine primarily focuses on the fate of General Motors’ EV1 electric car. The EV1’s were introduced to the California market in 1996 in response to California’s Zero Emissions Vehicle (ZEV) legislation. California was in a pollution crisis. The amount of smog in the air threatened public health. The California Air and Resource Board (CARB) targeted the source of the problem, auto exhaust. The ZEV legislation required two percent of vehicles sold in California to be emissions free by 1998 and ten percent of the cars sold in California to be emissions free by 2003. With this new legislation, the reemergence of the electric car, a vehicle that was once popular in the thirties, began. Before this legislation General Motors had previewed an electric car, the Impact. Because it had flaws such as a low maximum speed, and low mileage per charge, it wasn’t popular. In 1996, General Motors introduced the Impact…

    • 1775 Words
    • 8 Pages
    Powerful Essays
  • Better Essays

    In today’s market business really look at what the others in their competitive market are doing to compare how they are doing as a business or corporation. They do this by evaluating the industry averages and the financial ratios. When corporations and financial advisors look at the industry average and the ratios it helps them identify the industry strengths, weaknesses and the overall health of the financial standings of the organization. The automotive and transportation industry with a focus on General Motors (SIC:37110000) is what our group as chosen to examine for our comparison. General Motors was started in 1908 by William Durant by the combination of over 17 independent companies in to one general company, thus eliminating his competitors of the industry. This increased the overall average of the industry and increased the company’s financial health. That was then, now General Motors in number 3 in the market as it shows in Bloomberg Business week graph.…

    • 782 Words
    • 7 Pages
    Better Essays
  • Satisfactory Essays

    Chiquita, great work on the discussion, you highlighted the impact and struggles experienced by GM over the years on the American society and the world to be exact since they are a multinational organization. I am in agreement that even though the company has gone through difficult times they are still among the top in the industry throughout the world. Personally what gives great confidence as an investor in GM is the fact that they have gone through difficulties and manage to rebound time and time again. Under the leadership of James D. Mooney, the cooperation survived the economic depression and World War II by being flexible and adjusted to the change in environment (Wren, 2013). Additionally, the other point that gives confidence when…

    • 307 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Management and Labor Unions

    • 8329 Words
    • 34 Pages

    Welch, D., Beucke, D., and Kerwin, K. (2005, May 9). Why GM’s Plan Won’t Work.…

    • 8329 Words
    • 34 Pages
    Powerful Essays