Professional Documents
Culture Documents
SECTOR
Consumer Durables
INDUSTRY
Motor Vehicles
MARKET CAP
$49.3B
General Motors Co. engages in the designing, manufacturing, and selling of cars,
trucks, and automobile parts. General Motors (GM), one of the world's largest auto
manufacturers, makes cars and trucks, with well-known brands such as Buick, Cadillac,
Chevrolet, and GMC. The company was founded by William C. Durant on September 16,
1908 and is headquartered in Detroit, MI.
Top Executives
Mary Teresa Barra
Daniel Ammann
President
Charles K. Stevens
Randall D. Mott
Jeffrey A. Taylor
Formed in 1908, General Motors was the world's largest carmaker between 1931
and 2008.
GM filed for bankruptcy protection on June 1, 2009. In the bankruptcy petition,
GM claimed slightly over $82 billion in assets and nearly $173 billion in debts.
GM's failure of leadership is astounding and ironic given its early history as an
poisonous, adversarial relationship with employees, they had to deal with a militant union
that made it impossible to manage production effectively.
Maintaining a good relationship with your employees is a vital point to make your
company function effectively. And of course, if your production employees feel that you
dont value them as much as you should, then their work would be below satisfactory.
GM paid the price dearly and they lost a good deal of money just by not maintaining
good relationship with their production employees.
Factor #3: The third factor is the supreme arrogance and incompetence of companies like
GMcompanies that are run by people who are out of touch with reality or who lack the
courage to do what needs to be done. GM has been losing market share for years and did
nothing to fix their fundamental problems in the belief that they are simply too big and
too important to fail.
GM grew overconfident that just because they were doing good that they wouldnt fail.
They were wrong. The fact that thet were losing market share and they did nothing
reflects the way that they think. GM thinks that by ignoring the problem ahead of them
and just by simply focusing on the fact that their products are on top then their problems
would fix themselves. They grew arrogant and overconfident that by the time they
acknowledged their mistakes, it was simply too late for them to right their wrongs. And
they suffered the price very dearly for it became the cause of their downfall.
Other reasons behind General Motors downfall:
GM maintained too many divisions and products that lookalike too much
They didnt cut off production much during the economic crisis
Unsustainable strategies
Pension liabilities and health-care issues
All these practices resulted into GM having a total of $172 billion liabilities
Loss of market focus across the many different portfolio levels in the company
Oil prices; cars made by GM are traditionally not of those with low gasoline
consumption (This could be highlighted as another example of rigidity of GM and
unwillingness to accept new trends and to respond to market needs).
GMs financial metrics have focused on growing market share and revenue, rather
consumption) that did not match to the demand of customers after year 2000. This was
caused partly by the high self-confidence of the top management.
Recommendations:
General Motors must differentiate their products so that customers can get a sense
of value-added
Create/Change the organization that will make the company more flexible to be
In 1972, General Motors made the First Automotive Brake System (ABS).
Production hardware and support was provided by the component divisions: Delco
Moraine (brake pressure modulator),Delco Electronics (controller), Delco Remy
(solenoid valves) and Packard Electric (wiring harness). This initial offering of ABS,
however, started what would become a significant industry penetration of digitally
electronic controlled ABS in the 80s & 90s and it enabled the next generation of braking
sophistication: stability control systems of the 2000s.
In 1973 a project was initiated to develop a vehicle computer using a
microprocessor. The effort was executed at the Electronic Control Systems Department
within the GM Engineering Staff. This ECS Department was created in 1971 by Trevor
O. Jones under the directive of Edward Cole to advance the utilization of electronics in
automobiles. The algorithms and interface circuitry used in these projects provided a
good knowledge base for this microprocessor specification. By the early 80s,
microprocessors were integrated into production vehicle systems. And their biggest event
yet happened in 1971 when General Motors made the 1 st car that the Apolo 15 drove on
the moon. These are only a handful of their innovations over the years. What makes these
innovations unique are the fact that it became a baseline for other car companies to
follow for future generations of car innovation.
rather than a period in the storied history of this American corporate icon
The most important point for anyone in management to learn and remember is
Sources:
money.cnn.com General Motors Co (Company Description)
Access: <http://money.cnn.com/quote/profile/profile.html?symb=GM>
watchmojo.com The History of General Motors: From Buick, Cadillac and Pontiac to
Chevrolet (Video Script)
Access: <http://www.watchmojo.com/index.php?id=9956>
bobmaconbusiness.com Management Lessons to be Learned from the Failure of General
Motors. 2009, April 6
Access: <http://bobmaconbusiness.com/?p=230>
hbswk.hbs.edu GM: What Went Wrong and Whats Next. 2009, June 15
Access:< http://hbswk.hbs.edu/item/gm-what-went-wrong-and-whats-next>
Dshort.com. Weekly U.S. Retail Gasoline Prices Since 2000 [online]. 2009, June 4 [cit.
2012-04-28]. Access: <http://dshort.com/inflation/headline-coreCPI.html?gasoline-crudesince-2000>.