General Motors Case Study

In: Business and Management

Submitted By mwatson22
Words 751
Pages 4
General Motors
Case Study #3

Problem Summary:
One of the most serious problems that GM faces is when the firm announced a $10.6 billion loss, which was their first in 12 years. The auditors for General Motors even thought that the firm’s survival was in substantial doubt even if they received the additional $30 billion they were going to borrow from the federal government. The problems have grown as a result of mistakes by GM’s management over the last 30 years. They built up a bloated bureaucracy that supplied boring, low-quality cars for many years. GM will also lose leadership of the United States market, having already been replaced by Toyota as the world’s largest automaker. GM has been burdened with a high cost structure result of contracts that they signed in order to end a prolonged strike by the United Automobile Workers. They faced the biggest challenge in dealing with health and retirement benefits that GM had. The huge costs made it difficult to cut back on the productions of GM, even if that meant they had to rely on incentives to get the cars of the lots. They were also struggling with the sales of their lineups of passenger cars. Some people think that GM will not be able to move fast enough on their reorganization in order to become competitive again, and that they will fail in the meantime.

Analysis: GM faces millions of dollars in losses; due to the government loans they were receiving in order to hopefully accomplish some restructuring play. The former heads such as Frederic Donner and Roger Smith were the reason that GM made mistakes, and resulted in making low quality cars. GM claimed that they thought it made sense to give in to the union’s demands since the strike was started to be very costly, which resulted of the high cost of contracts that were signed to prolong the strike. GM had increased health costs that were causing…...

Similar Documents

Dominion Motors Case Study

...Dominion Motors Impact of Recent Change: Recently, there have been estimates pointing to an average of 1,000 new wells each year for the next five years, which implies that there should be an increase in demand of oil well pumping motors. This is great news for Dominion considering they had acquired over 50% of the available market since 1973 for these motors. The rates charged by electrical companies were also affected and instead of a flat rate for all motors, there was a monthly base charge per horsepower. A 5 horsepower motor would be the cheapest at $125 per month, a 7.5 horsepower would be $161.25 per month, and most expensive would be a 10 horsepower motor at $200 per month. Companies using larger horsepower motors would find that their power rates would accumulate very quickly, and build up to very large costs. |Motor Size | |Monthly Base Charge per Horsepower | |Total Charge per Month | |5-hp |x |$25.00 |= |$125.00 | |7.5-hp |x |$21.50 |= |$161.25 | |10-hp |x |$20.00 |= |$200.00 | Oil companies would save $465/mo. switching from a 10-hp to a 7.-hp motor, $435/mo...

Words: 2644 - Pages: 11

Toyota Motors Case Study

...Introduction Toyota Motor Corporation is one of the world largest automobile manufacturing. They have manufacturing plant throughout the world. Toyota has thirteen manufacturing plants in North American alone. One of its largest plants is here in the Georgetown, Kentucky where they produce the new Camry. Toyota is poised to overtake General Motors and become the largest car manufacturer in the world. Much of this success can be attributed to the renowned Toyota Production System (TPS). This system is one of the most admired lean manufacturing systems in existence and is constantly used in operational management text books as an example of how important operational management is to an organization. The main objectives to the TPS are to design out overburden and inconsistence, and to eliminate waste. Toyota has spent millions of dollars to bring over this system and implement here in its North American manufacturing plants. In our case we focus on the breakdown of this system that allows a small issue in seat installation to turn into a large problem that is slowing down production. Car production has dropped from run ratio of 85% to a run ratio of 95% in only one month. The run ratio measures the number of cars actually assembled in proportion to the number of cars that could have been assembled with no line stoppages. Along with the slowdown in production no one can put their finger on what is causing this and why there is a breakdown in the otherwise efficient TPS that......

Words: 2247 - Pages: 9

Toyota Motors Case Study

...Toyota Motors Case Study Introduction Toyota Motor Corporation is one of the world largest automobile manufacturing. They have manufacturing plant throughout the world. Toyota has thirteen manufacturing plants in North American alone. One of its largest plants is here in the Georgetown, Kentucky where they produce the new Camry. Toyota is poised to overtake General Motors and become the largest car manufacturer in the world. Much of this success can be attributed to the renowned Toyota Production System (TPS). This system is one of the most admired lean manufacturing systems in existence and is constantly used in operational management text books as an example of how important operational management is to an organization. The main objectives to the TPS are to design out overburden and inconsistence, and to eliminate waste. Toyota has spent millions of dollars to bring over this system and implement here in its North American manufacturing plants. In our case we focus on the breakdown of this system that allows a small issue in seat installation to turn into a large problem that is slowing down production. Car production has dropped from run ratio of 85% to a run ratio of 95% in only one month. The run ratio measures the number of cars actually assembled in proportion to the number of cars that could have been assembled with no line stoppages. Along with the slowdown in production no one can put their finger on what is causing this and why there is a breakdown in the......

Words: 337 - Pages: 2

Ford Motor Case Study

...Ford Motor Case Study Table of Contents Executive Summary 3 Introduction 4 Issue Identification 5 Environmental and Root Cause Analysis 6 Alternatives and Options 8 Recommendations 10 Implementation 11 Monitor and Control 12 Exhibits 13 Executive Summary After reviewing Ford Motor supply chain, we became aware of its very complex nature. Due to this complexity we are forced to search for alternatives to overcome the costly supply chain challenges faced by our industry both now and in the future. The present system has an inefficient control of a large database and a vast and complex network of suppliers. We need to change our supply chain in order to make it more cost effective and profitable. After careful analysis we recommend the implementation of a partial virtual integration system, similar to the system used by Dell Computers. With this system, Ford will use information technology and the internet to interact and transact with both their suppliers and their customers. Ford can increase their sales by providing better customer service and faster communication from the supply end through to the manufacturing division and right on to their end user, the customer. This system will be implemented with their existing supply chain so Ford will cover both markets at the same time. If Ford concentrated only on the virtual system their competition would put them out of business,......

Words: 1783 - Pages: 8

Aero Motors Case Study

...GenMax-Aero Motors As the Director of Business Development at Aero Motors, I have evaluated each of the two possible options to introducing GenMax’s subsidiary, Aero Motors to the North American Market. The first option is the go-it-alone strategy in which we will attempt to penetrate the market with our own brand. The second option is to partner with a local company which will minimize the risk and enable Aero Motors to leverage the partner’s infrastructure and favorable brand image. After much consideration, it is evident that there are advantages and disadvantages to each alternative. Below I have delineated each option based on the risks and rewards and as it relates to effective use of our brand followed my recommendations. Go-It-Alone: Risk and Reward This strategy can bring a lot of reward if the project is a success, because GenMax will be able to capture all the profits and other possible benefits such as newly earned brand recognition. Additionally, GenMax will be able to take advantage of the two years before the competitors can utilize the new technology allowing for greater profitability. Lastly, by utilizing a go-it-alone strategy, Aero Motors will enjoy the autonomy to make decisions without having to wait for the partner to agree or compromise. While those rewards appear to be favorable, there are also risks that should be considered. In utilizing the go-it-alone strategy one must take into account the limited or even non-existent brand......

Words: 1049 - Pages: 5

Wolf Motors Case Study

...1- ¿Qué recomendación le haría usted a John Wolf acerca de la estructuración de la función compras para la red de centros distribuidores de Wolf Motors? La calidad del servicio después de la venta depende del funcionamiento efectivo de la función de compras; siendo uno de los tres apoyos fundamentales –y por eso una prioridad competitiva- del éxito de Wolf Motors, la maximización de esta función no se puede dejar al azar. Por el momento, la gestión de la función compras - y en realidad el funcionamiento general - de cada una de las cuatro distribuidoras se hace de manera totalmente independiente y autónoma. A primera vista, esta segmentación no parece eficiente: * No capitalización de los aprendizajes (en términos de métodos de trabajo, de mejoramiento de los procesos, de relación privilegiada con particulares proveedores) * Pérdida de tiempo (tiempo de aprendizaje, tiempo de mejoramiento de lo existente, tiempo de construcción de relaciones privilegiadas) * Aumento implícito de los costos * No reparto de los datos históricos de demanda y de ventas entre distribuidoras * Pérdida de información clave para hacer pronósticos fiable * Pertinencia de los pronósticos en juego => pertinencia de los aprovisionamientos en juego => Riesgo de no satisfacer la demanda del cliente en tiempo => deterioro del imagen de marca del grupo Para disminuir los riesgos y las disfunciones actuales causados por el funcionamiento como entidades......

Words: 510 - Pages: 3

General Motors Case Analysis 2014

...Corporate Finance FIN-325 I. General Overview General Motors, also known as (GM), is an American multinational corporation headquartered in Detroit, Michigan. General Motors was founded on September 16th, 1908 in Flint Michigan by William C. Durant as a holding company, or a wholly owned subsidiary for Buick. The company designs, manufactures, and distributes vehicles on all six major continents under 18 brand names. Some of their well-known brand names include Chevrolet, Buick, Cadillac, GMC, Opel, Vauxhall, Wuling, Baojun, and JieFang. GM also operated the brand names of Saturn, Pontiac, and Hummer until 2009. During this time, GM was emerging from chapter 11 bankruptcy as a result of the 2008 financial crisis, and decided to shed those brands for strategic reasons in order to compete with foreign emerging vehicle distributers in the market. In January 1912, the company decided to incorporate themselves under the GM brand name, and were the gold standard in the automobile industry for almost 80 years. From 1931-2007, GM successfully led global sales amongst every car manufacturer in the auto-manufacturing industry. Currently, the automobile industry is one of the most fierce industries in the market. Not only is GM competing with American car manufacturers such as Ford and Dodge, but also foreign companies such as Toyota, Honda, and Hyundai. II. Financial Statements (attached excel sheet) Anthony Brooks For: Professor Goncalves Corporate Finance......

Words: 3325 - Pages: 14

A Kia Motors Case Study

...Using sports marketing to engage with consumers: A Kia Motors case study Introduction Today’s consumers have higher expectations than ever before. Dramatic improvements in media, communication and transport have made the world’s economy more connected. Products developed in one country have become increasingly attractive in other parts of the world. However, entering markets in other parts of the world is not an easy task. Entrants face many different challenges as they try to develop their brand profile. This is especially evident in mature markets like the UK car market. This market has a number of long established brands. The awareness and brand loyalty that exists for established brands form a barrier to entry for new organisations. This case study illustrates how Kia , a South Korean motor company, has used sports marketing to develop its brand identity in the European motor market. The Kia Motors Corporation, based in South Korea, has 12 manufacturing and assembly plants and subsidiaries in 165 countries around the world. Globally the Hyundai Kia Group is now the fourth largest car company in the world. Kia Motors UK has more than 166 dealerships. It also has plans to grow the network to support the increasing demand. Kia is a relatively new entrant to the UK car market. However, it has become more well known in recent years. Kia does not have the same level of brand heritage in the UK as it does elsewhere in the world. Kia aims to overcome this through its massive...

Words: 1867 - Pages: 8

Wolf Motors Case Study

...Case Study – Chapter 12 Read case study of Wolf Motors on page 439 and answer three questions at the end of the case (at least 50 words each). 1. What recommendations would you make to John Wolf with respect to structuring the supplier relationship process for the Wolf Motors dealership network? Wolf Motors should consider a centralized inventory management system. A centralized system will help to consolidate ordering, purchasing, and buying decisions for each of the four dealerships. This will allow Wolf Motors greater leverage with suppliers and will allow for better quality control. In addition, Wolf Motors could negotiate with their suppliers for better pricing through higher volume ordering and purchasing. This will allow Wolf Motors to achieve economies of scale. In addition, Wolf Motors should consider an automated electronic data interchange (EDI) inventory management system. An EDI system will allow the dealerships to be connected to one another (share inventory information) as well as to suppliers. The EDI system would alert Wolf Motors and suppliers when critical inventory levels are reached. Also, inventory pooling between the four dealerships may eliminate the need for safety stock at all four locations as well as the need for overstock. Parts can be moved between the dealerships. Finally, a vendor-managed inventory (VMI) system should also be considered. With a VMI, the supplier is responsible for maintaining the inventory level required by the......

Words: 652 - Pages: 3

General Motors Case Analysis

...Case Analysis: General Motors Strategic Issues and Problems General Motors (GM) is the largest industrial corporation among the U.S. automakers. Because of the trends of tighter government regulations and competition from foreign automakers, the company has been challenged of being competitive. In order to improve the current situation, the company is seeking a strategy to develop for next few years. Analysis and Evaluation Currently, GM has two existing Detroit manufacturing facilities that need to be demolished and replaced by one state of new plant. The new plant would require being close to suppliers and about 500 acres to allow for a new robotics system within the budget of $500 million. Because closing the two existing plants would lose more than 7,000 jobs in local area, Detroit Mayor Coleman Young wants GM to remain and build new plant in the greater Detroit area. Poletown is the only one site that meets both GM and Detroit Mayor’s requirements. However, besides the cost of new plant, GM would have to pay an additional cost of $207 million as compensation to the local residents and as preparation expense. On the other hand, the Sunbelt sates, where have potential cheap labor for GM to reduce operation cost, has offered large tax incentives to GM. Therefore, it would be more profitable for GM to build the new plant in the Midwestern states within the Sunbelt. Alternatives GM has two main alternatives to improve its current situation. First, GM could......

Words: 488 - Pages: 2

General Motors Case Analysis

...General Motors Case Analyses I. History General Motor was at one time, one of the world’s largest car and truck manufacturers reaching back more than a century in 1908, when William C. Durant founded General Motors Corporation. He brought together 25 independent car companies, which included Oldsmobile, Cadillac and Oakland, known as Pontiac. General motors was just a holding company for these independent car companies. Durant left the General Motors firm in 1911 and went on to be co-founder of the Chevrolet Motor Company with Louis Chevrolet. General Motors main competitor was Ford Motor Car Company, owned by Henry Ford, who developed the Model T car. In 1918, Chevrolet entered the General Motors fold as it became part of the Corporation. The first GM car was built in 1918 and it was the Chevrolet 490. General Motors went through many phases of development from 1910-1929. GM’s new design over Ford’s Model T design, set the place for production, design and the marketing innovation of vehicles. GM’s first diversification took place when they added Chevrolet. They used its philosophy and strategy for marketing. Today, GM is one of the largest automakers in the world and the global headquarters is located in Detroit, MI. By the 1930’s, GM began to start in aircraft design and manufacturing by buying Fokker Aircraft Corp of America and Berliner-Joyce Aircraft and merging them into General Aviation Manufacturing Corporation. 1948, GM divested North American Aviation as a......

Words: 2300 - Pages: 10

General Motors Case Study

...General Motors Case Study Paper The main problem that General Motors was facing was declining market shares and a changing industry, General Motors (GM) launched an ambitious effort that transformed its supply chain and made customer satisfaction a priority (Cohen & Roussel, 2005). In the late 1990s, the Internet seemed poised to transform the automobile industry. Consumers armed with information could quickly compare prices, options, quality, and service—and make more informed choices. General Motors observed these changes warily. By the late 1990s the need for change was becoming clear. Consumers were more savvy, powerful, and demanding. Yet GM's responsiveness lagged the industry (Cohen & Roussel, 2005). Dealers grew increasingly frustrated by the mix of inventory foisted on them. Even in key markets, dealer lots were clogged with over 100 days of supply. To clear out slow-moving products, GM had to offer sales incentives, which squeezed profit margins (Cohen & Roussel, 2005) Dealers couldn't get the vehicles they wanted—the vehicles their customers wanted. Desirable options such as aluminum wheels, leather interiors, and V8 engines often were not available in adequate quantities. Unavailable options, or constraints, were high at GM dealerships relative to the industry as whole, averaging tens of thousands of orders affected at any given time over the range of GM products (Cohen & Roussel, 2005). Patrons who chose to special-order a......

Words: 1401 - Pages: 6

Organisational Theory- Case Study- General Motors

...Established in 1908, General Motors (GM), with its headquarters based in Detroit, Michigan was one of the world's largest automakers in the world. Their business operate in 140 countries with an employment of 204000 people, and together with their strategic allies, they produce cars and trucks in 34 countries (General Motors, 2010). However, in June 2009, GM filed for bankruptcy protection and reach out to U.S government for financial assistance (Taylor III, 2009). In this essay, a look will be taken at the nature of GM’s organizational structure such as its organizational design and how GM’s operation is conceptualized, as well as its existence as an organization. How GM and the environment affect each other will be discussed too. GM was born out as a conglomerate of firms (Bordenave & Lung 2003). From a multinational organization with a headquarter set in Detroit and unified products, design and manufacturing resources throughout its field of business, GM was quick in moving itself out to become a global organization whereby they valued diversity and flexibility to match with the changing pattern of opportunities and threats posed in the industry sector. They actually diverged from Ford’s monolithic structure, gained own corporate stability and shortly after, challenge Ford’s hegemony internally and globally (Bordenave & Lung 2003). A division of labour is set up, whereby production has been divided into different skills and tasks spread across countries (Hatch &......

Words: 2290 - Pages: 10

Case Study on General Motors

...Organization and Management – Assignment 1 I. Information General Motors (GM) was one of the market leaders in automobile production prior to the 1980s and 1990s. Under the supervision of Alfred P. Sloan Jr., GM developed 5 independent divisions that marketed their own line of cars. These divisions – Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac – catered to different economic price ranges. This organizational design led to GM being the world’s largest manufacturing organization during the post-World War II era. However, during the 1980s, GM experienced its first loss since 1921. The newly appointed CEO Roger Smith began redesigning GM’s organizational structure to push decision making down to the operational level instead of the management level. He created two different groups, the BOC – composed of the Buick, Oldsmobile and Cadillac divisions, and the CPC – from the Chevrolet, Pontiac and GM of Canada. Each group had complete authority to organize whichever way they wanted and to do what was necessary to bring GM back into a good economic status. The BOC group organized four independent strategic business units, which was reminiscent of the previous organizational structure of GM. The CPC group on the other hand, moved towards the traditional centralized organizational structure. Upon the appointment of Jack Smith as CEO of GM in 1993, he carried out what would seem as harsh measures for GM. He eliminated a lot of staff by combining......

Words: 1113 - Pages: 5

General Motors Case Study

...Case 34 General Motors What are key forces in the general and industry environments that affect the U.S. auto industry, and General Motors? General Motors (GM) has suffered different threats and difficulties that have put in risk the continuity of its production. Before the year 2000, GM has been going through different production, financial, and development problems. Wagoner has tried in different ways to address each problem in order to make GM more successful. Unfortunately GM had high losses that have made it very difficult to solve those problems. All this is due to a very competitive environment in each there were different forces that affect the development of the firm. According to Porter’s Five-Forces Model of the Industry, there are five aspects to analyze, the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products and services, and the intensity of rivalry among competitors in an industry. First, the threat of new entrants highly affected the firm. GM has so many divisions and units which made the firm weak in its integration. GM had 27 different units within the firm that purchase parts that made it difficult to achieve economies of scale. All those units worked independently and do not contribute each other. In other to solve that, Wagoner started working to integrate each unit, especially overseas. Also, he took the decision to reduce the number of units and divisions......

Words: 2202 - Pages: 9

Spoken Word | أفلام أجنبية أفلام مغامرات Web Dl فيلم Pocketman and Cargoboy 2018 مترجم | Ania/ Anne with an E