Strategies at General Motors: Transactional and Translational Exposure Problem Statement In September of 2001 General Motors (GM) was faced with a billion dollar exposure to the Canadian dollar. At the time‚ North America represented approximately three-quarters of GM’s total sales and this large exposure to the CAD could significantly affect GM’s financial results. GM had a passive strategy of hedging 50% of its exposure; this paper explores the impact of hedging 75% of the exposure. Additionally
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Introduction General Motors was the world’s largest automaker and‚ since 1931‚ the world’s sales leader. In 2001‚ GM had unit sales of 8.5 million vehicles and a 15.1% worldwide market share. Founded in 1908‚ GM had manufacturing operations in more than 30 countries‚ and its vehicles were sold in approximately 200 countries. In 2000‚ it generated earnings of $4.4 billion on sales of $184.6 billion. The company is trying to accurately calculate the risk of a potential devaluation to the ARS. In
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3 2. COMPETITIVE CURRENCY EXPOSURE AT GM (2001: Using Case Info) 3 2.1 Performance 6 2.2 Automobile Market in USA 7 2. 3 Competitive Exposure Mechanism 8 2.4 Yen Exposure Quantified 9 3. APPROACHES TO MANAGE GM’s COMPETITIVE EXPOSURE 10 4. GM’s COMPETITIVE YEN EXPOSURE (993-2005) 13 4.1 GM’S US Car Sales Exposure 14 4.2 GM’S Market Share Exposure 15 4.3 GM’S Net Income Exposure 16 4.4Implication of result on hedging strategy 17 5. NEW GM’s COMPETITIVE EXPOSURE 18 5.1 Issue in measuring
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Daniel Pinga AEM 4290 General Motors‚ JPY-USD Exposure Executive Summary General Motors Corporation‚ the world’s largest automaker‚ has an extensive global outreach‚ which places the firm in competition with automakers worldwide‚ and subjects itself to significant exchange rate exposure. In particular‚ despite most of its revenues and production being derived from North America‚ depreciating yen rates pose problems for the firm indirectly through economic exposure. While GM possesses ‘passive’
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Strategies at General Motors: Transitional and Transactional Exposures” Issues: 1. Should multinational firms hedge foreign exchange rate risk? They should to better manage the foreign exchange risks. If not‚ what are the consequences? The gains in the foreign country would contribute less when the foreign currency depreciated against the home country’s currency. If so‚ how should they decide which exposures to hedge? The firm should focus on the importance of hedging exposures to the current
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of “something out of nothing” whereas it actually is “the radical and effective change of something understood deeply” (Robinson and Hackett 1997). General Motors is certainly trying to appreciate this‚ and the company is always seeking to bring new products - or improvements to their current products - to market. COMPANY BACKGROUND General Motors Corporation‚ also known as GM‚ is the world ’s largest automaker and has been the global industry sales leader for 75 years. Founded in 1908‚ GM today
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States government have assumed control of General Motors? If you were to read a story in the news that a government had assumed control of a private company‚ what country might come to your mind? Possibly Russia‚ Cuba‚ China‚ maybe even Vietnam? Probably the United States would be the furthest from your mind. Not everything the United States government does should be considered socialistic‚ but obtaining control of the private company General Motors was an act of socialistic behavior. As Lake
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MGT 4123 Business Policy Case Analysis September 27‚ 2009 Student Name: Adam Gher Case Name: General Motors I. Mission To develop and grow a performance-based‚ world-class‚ competitive diversity supply base that will work with General Motors towards its goal of being the market leader in the automotive industry. G.M. is a multinational corporation engaged in socially responsible operations‚ worldwide. It is dedicated to provide products and services of such quality that our customers
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General Motors General Motors is a well known American company that is responsible for the fabrication and production of vehicles under others subsidiaries or brands such as Buick‚ Chevrolet‚ Cadillac‚ GMC‚ Oldsmobile‚ and Pontiac. Besides of the American brands there are other brands working through joint ventures like Opel‚ Wuling‚ Vauxhall‚ Holden‚ and Faw Jiefang. It seems to be an interesting strategy of market power the diversity of vehicles and models oriented to satisfy the necessity of the
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GENERAL MOTOR At the new General Motors‚ they are passionate about designing‚ building and selling the world’s best vehicles. This vision unites of GM as a team each and every day and is the hallmark of their customer-driven culture. Based on an article published by Uncommon Thought in 2005‚ one of the biggest concerns relating to the day to day operations of General Motors was the increasingly erratic cost of fuel. Because GM relies on a steady supply of fuel for transportation of their vehicles
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