What are the general environmental factors that have an impact on General Motors? General Motors (GM) has experienced very hard times since 2000, just as much as any other company in the car industry. That is why GM had to reduce its hourly workers, which means that 35,000 jobs were eliminated. Moreover, GM had decreased its health care costs to extract more cost savings.
To face the crisis, CEO Rick Wagoner also cut the common stock of General Motors dividend by half and reduced executive salaries. So, it can be seen how the economic downturn has an impact on GM. In addition, GM's market share dropped twenty five percent for the first time since the company was created. Currently, cars and trucks from GM do not seem to hold much appeal for buyers.
The auto industry was being hit by a weak US and global economy, rising gas prices, social and political environmental concerns and issues. In order to overcome these potential threats, GM should consider mass production, and use alternative energies such as electric and hybrid technology. Although the biggest rivals of GM are the Japanese auto companies, the market remains open.
Tags: General Motors, CEO Rick Wagoner, Auto Industry Crisis
[...] A lot of management mistakes had been made before. Actually, the bureaucracy was too cranky and ambition was not there. That is why GM used to produce low- quality cars. As a result, the firm's market share has continued to drop. Even if Wagoner is very motivated to turn around GM, the company culture is very strong and it is very hard to change the management of such a big and old company. Wagoner called it a terrific culture. During chaos, a leader has to focus on real emergencies and make priorities to have a good judgment call. [...]
[...] Then, Wagoner decided to restructure some GM units through the world. For example, all the Europeans units had to collaborate with each other, in terms of marketing, designing and manufacturing cars. They used to be much more independent. The main aim was to reduce the firm's overall cost structure over the next years. Moreover, Wagoner wanted to impose tough results and he used to exert controls on people. Wagoner assessed performance of every manager, even Lutz was judged. So, this atmosphere is not good for the company. [...]
[...] Finally, GM agreed to pay employees for years after a furlough and fired them. So, if GM would have closed plants and accepted a smaller piece of the market instead of firing employees and paying annuities to them, the strategic move would be more efficient Are the steps Wagoner took sufficient to turn GM around? The situation of General Motors is not good at all. In May 1997, GM stock price was 0%. It rose up to 60% in 2000, but dramatically decreased to in May 2007. [...]
[...] Richard Wagoner tries very hard to turn around the company from the crisis, even if it is a difficult mission. Nevertheless, GM has a vision and its strength lies in its attempt to respect it. The vision is to be the world leader in transportation products and related services. GM wants to earn customers' enthusiasm through continuous improvement driven by the integrity, teamwork, and innovation of GM people. Moreover, Wagoner has been working in General Motors for a long time; he was COO before being CEO. So he was aware of the type of top management in GE. [...]
[...] Moreover, Wagoner wants at all costs to stay in the North American market, even if Kirk Kerkorian could push GM into an alliance with Renault-Nissan. But the US market is blocked, and other markets like China or India are completely open. So, this strategic move is maybe not a good idea to keep GM on its feet. If GM would export its cars, it could enhance the brand in foreign country, which would be good for its reputation in the US. [...]
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