General Motors Demise Essay

Submitted By hdennis
Words: 1415
Pages: 6
Open Document
General Motors Demise
Student’s Name
BUS 640 Managerial Economics
Ashford University
Dr. Brian Shaw
Date

General Motors Demise Every American has seen the downfall of many automobile industry giants and General Motors topped the list in 2009 after filing bankruptcy due to bad decisions made by their executives. More specifically the bad decisions of their Chief Executive Office, Rick Wagner. Many companies have had leaders that made crucial decisions for them and ended up losing the company, causing many people to lose their jobs, lose their pensions, and causing an uproar with the American people. This paper will discuss the company of General Motors, who they are as a company, the actions that led to bankruptcy in 2009, and the company they have become since then.
Background of General Motors General Motors (GM) was founded in September 1908, by a man named William “Billy” Durant (Company: History and Heritage, www.gm.com, 2013). The company started out by selling horse drawn vehicles and once it started making automobiles it only had the Buick Motor Company. The following is a timeline of important events that occurred in the General Motors Company:
1908: General Motors was founded
1920’s: GM added more selection to their vehicle list
1942: GM delivered more than $12 Billion worth of material during the war
1971: GM pioneered the use of engines that could run on low lead or unleaded fuel
1973: GM was the first to offer airbags
1982: GM marked its largest single production expansion outside of North America with the opening of the new complex in Zaragoza, Spain
2008: A major recession and global credit crisis drove car sales to near depression levels and dried up private sources of capital
2009: GM filed for bankruptcy
2010: GM emerged as a new company that only offered four brands: Chevrolet, Buick, Cadillac, and GMC
The Road to Destruction According to Sonnenfeld (2009), Roger Smith, the CEO of GM from 1981 through 1990, had a disastrous attempt to restructure GM. Roger Smith had many ill attempts to make GM better as a company only to fail in the end. Smith ignored the effort to respond to increasing Japanese competitors in the smaller car market and resulted in the introduction of the unpopular, unattracted x-cars (Sonnenfeld, 2009). Not only did Roger Smith ignore the competitor’s entry into the small car world, he clustered many units together into two categories, big car and small car, and this was supposed to spark efficiencies and cross-divisional unity, but resulted in internal sparring and too many lookalike cars with various name plates. This gathering of divisions was disastrous to the luxury market (Sonnenfeld, 2009). Along with the bad decisions of Smith as Wagner took over, it is said that he had a chance to make it all better because he was intelligent, a car enthusiast, and had been in the business for a long time, but decided to take the steps of Smith and ultimately cause GM to file bankruptcy in 2009. In 2002, Wagner ignored urgent trends to focus on car development while reaping 90% of profits from pickups and SUV’s (Sonnenfeld, 2009). Wagner ended up keeping the divisions tightly held together and did not premier any new looking vehicles that were to customers satisfaction. According to Brown (2011), GM never fired or let any employees go when they did wrong; they would keep them on until they were able to retire. Many would think GM was a great place to work because they did not let you go if you did something wrong. All good businessmen and women know that if an employee does wrong, the company ends up paying for it two-fold.
Government Regulations Stewart (2012) states that the government owns less that 30% of GM. With the government owning a portion of GM raises the question in people’s mind, are we paying taxes to run the government or to run businesses in America. The government also has an agency that
Show More

Related Documents: General Motors Demise Essay

Automotive Industry Bailout Essay

Motor City or Bust The American citizens have faced trying times and even tougher sacrifices in the last few years. The stock markets crashed, a severe housing crisis evolved, and then there was Motor City. The Motor City was on life support and needed financial rescue like never before. There was no mystery involved for the ridicule and objections to investing more money into the very hands of top executives at the root of a corporation’s demise. Head officials faced a crucial decision…

Words 1227 - Pages 5

would you buy Gm? Essay

Company – General Motors Corporation Stephan Diaz Bucp-781 Fouzia Chowdhury- 0935008 Shadik Shamim -0959601 Munkhdelger Batchuluun-0961552 Mission Statement: "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 will receive superior value while our employees and business partners will share in our success and our stock-holders will receive a sustained superior return…

Words 4615 - Pages 19

Harley Davidson Essay

HARLEY DAVIDSON KEISER UNIVERSITY ILKA CALIMAN 5/29/2013 HARLEY DAVIDSON Introduction/thesis: In 1953, following the demise of its last American competitor, Indian (Hendee Manufacturing), Harley-Davidson becomes the sole producer of motorcycles in the United States. I. The Harley-Davidson Motor Company had a small beginning, but has risen to unimaginable success. A. The supports of outrageously loyal owners have allowed the company to struggle but maintain its composure. 1…

Words 2109 - Pages 9

Gm Bailout Essay

GENERAL MOTORS BAILOUT PROBLEM Introduction Founded in 1908, General Motors has been one of the largest corporation and the second largest automaker in the world coming after Toyota. For 77 consecutive years from 1931 to 1908, GM has been a leading automaker and marketer as ranked by the total number of units sold yearly. General motors have also been a leading employer not only in the United States but also in other parts of the world where it operates. However, the company has been seriously…

Words 4931 - Pages 20

Essay On Electric Cars

thing that became electrical in cars were subsystems like battery, ignition and later on electronics. In 1912 when the electric starter motor was developed it made gasoline powered automobile that much more popular and convent so you didn’t have to hand crank anymore.No one back then considered it a viable option as a means of transportation. The ultimate demise of the car was that it was slow compared to a gas - powered car and the batteries were only good for one use. In fact people felt so optimistic…

Words 4335 - Pages 18

Lehman Brothers Fall

inside look at the emergence and growth of American industry and technology as well as influenced the establishment of the modern corporations today. Eventually, The Lehman Brothers’ “forward thinking” and risk taking led to and ugly turn, bringing demise to businesses, investment institutions, and their own firm; affecting the economy and handing the bill to tax payers. Lehman Brothers’ Rise In 1844, Henry Lehman immigrated from Germany to Montgomery, Alabama where he started a small store selling…

Words 1487 - Pages 6

Essay about Bond Market

Jason Miller Professor Wosnitzer Media and the Culture of Money May 12, 2012 The Bond Market: Where Do We Begin? How do you begin to describe the current financial crisis? The first place to start is at the beginning, which is much easier said than done. Where though do you begin? This is not simply a question of pedagogy. Rather, knowing the origin…

Words 2750 - Pages 11

Death and Dying Essay example

until it affects respiratory function (Gould and Dyer, 2011, p. 520). However, cognitive function is not affected by the disease. As the disease spreads to different muscles and limbs it deteriorates the muscle eventually causing paralysis. Loss of motor function throughout the body, difficulty speaking, difficulty breathing and difficulty swallowing are all signs and symptoms of ALS. Morrie mentions several times throughout the story of how he will die of suffocation once the disease reaches his…

Words 2158 - Pages 9

Risky Business FINAL Essay

Risky Business: How Risk Factors Can Undermine a Successful Enterprise Abstract This paper explores the mistakes made in the past by The Big Three: General Motors (GM), Ford, and Chrysler and presents the risk factors that could potentially undermine GM again. GM made an enormous mistake when they ignored their customers’ demands for fuel efficient vehicles. GM primarily focused on the production and distribution of sport utility vehicles (SUV) because they could make a larger profit…

Words 2138 - Pages 9

Skate To Where The Money Will Be?

72 HARVARD BUSINESS REVIEW As hockey great Wayne Cretzky used to say, the key to winning is getting firstto where the puck is going next. The same could be said about succeeding in business, and a new theory of profitability could help you do just that. to Where the by Clayton M.Christensen, Michael Raynor, and MattVerlinden NOVEMBER 2001 73 Skate to Where the Money Will Be When IBM decided to outsource its operating system and processor chips in the early 1980s, it was…

Words 5145 - Pages 21