General Motors Case

Jordan Harger

General Motors Case Study

2/10/16

In the General Motors case we see a large amount of problems equating to a very large dollar figure in debt for the company. The company went from being a strong American brand name to being so far in debt and bankrupted that it got the nickname “Government Motors”. Although it is now finally back on the right track, at times it looked like the company might have been in a never ending downward spiral. In 2009 GM was forced into bankruptcy by the government and had to receive $50 million dollars in exchange for shares of the firm. The firm ran up losses of over 82 billion dollars between 2005 and 2009 and had to turn to more government loans in order to survive. Over the course of several years there were many changes in top level management.

So what were the problems that caused GM to face such an economic downturn? Some of these problems included:

* In 1994 there were 27 different units within GM developing their own cars, making it difficult to achieve economies of scale

* High costs of producing vehicles

* Paying large amounts of money into health and pension

* As market share began to decline, it became difficult to design and market under several brands

* Problems selling its vehicles in the European market

* Functional areas worked separately which meant it took longer for a design to go from the drawing board to production

* Lack of standardization of “platforms” on which the firm built its cars.

* Product decisions were reviewed by as many as 70 executives, often taking months for a decision to be made.

General Motors had to act quickly and make the right decisions if it were going to overcome this terrible downward spiral and grow back to being the respected automobile company that it once was. It took many different attempts by many different leaders to get back on the right track.

Solutions to some of the problems that were made are listed below:

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