For GM, it ahs been a recipe of external and internal factors which have lead to its current situation. GM has also established OnStar which is a subsidiary dealing with vehicle safety, security, and provision of other information which is relevant to use and care of automotive.
Although General Motors was producing the main brands in the market, Japanese cars started making an inroad into the American market and consumers were having a wide range to choose from GM, This would be expended in financing closure of some plants and also restructuring of some of its operations.
The electric car saga, SUVs, and other technical problems with GM cars dwindled consumer confidence in the company while there was little that was done to redeem that image.
In s, GM General motors bailout problem essay faced with problems of meeting the standards that had bee laid down by the Clean Air Act. Internal restructuring should also see GM hire new technical staff that can put the company to another level.
When GM foresaw possible problems with financial performance, it would have taken drastic measures to either lay down some of its workers or renegotiate new terms with the worker.
However, the oil crisis came with new fate for the American auto makers and they have not been able to come out of that shock Jones, With such large number of employees, GM has been keen on it human resource management. Why GM is in the current financial situation There are different factors which can be singled out as the main factor contributing to the fall of the Detroit Big three including General Motors.
Retrieved 7th March from http: However, the turn of the new millennium spelt a new recession era for the company. Faced with the threat of bankruptcy, GM and other automakers have sought for government intervention in form of a rescue package which would stimulate their growth.
General Motors has consequently lain off million of workers and closed down some of it plants in a bid to reduce the cost of operation. First this calls for availing of more funds which are not available. Therefore, timely and prompt response to the changing nature of the industry and consumer demand market could have done a lot to avert the crisis faced by GM.
When the consumers were demanding for fuel efficient cars, GM continued producing SUVs which were not required in the market. Towards the end of the last century, there have been increased consumer concerns regarding the effect continued use of fossil fuel and the effects it was having on the environment Constantini, Government subsidies rarely work In the s, British Leyland was going bankrupt due to inefficient management, poor industrial relations.
In the whole decade, Japanese automakers sold an average of 2.
Therefore the current government bailout plan may not turn round the company unless there are other extensive changes that will be taken to complement the stimulant package.
This agreement has seen GM struggle to maintain a higher salary to its employees even when its revenues have continued to decrease.
The problems with GM have been gathering steam since s.
It appears like American economists have been obsessed with the idea that a bailout package would work for GM and other automakers. Retrieved 7th March http: This is true as can be reflected today in the situation GM is facing.
Unlike other car manufacturers, GM has a problem that continues to eat away its profit. However, this may not have an effect on the current financial crisis unless the company adapts more measures by restructuring its operation to the current situation in the market. The simple answer is no. Although its sales have been reducing drastically, GM produced more than 1.
This has consequently forced the company to lay off a large number of its employees and close down some of the plants which were operating below their capacity.
The company ahs also announced that it has engaged with United Automobile Workers Union to negotiate for terms that would reduce its overall expenses on employees Corrigan, Although GM has promised that by it would be producing electric cars, there are still doubts that its electric brand Chevy Volt would hit the market by the time.
However, the problem at GM and in the general United States automotive industry cannot be attributed to the current economic crisis alone. The solution to the problems of GM has taken different turns. At least then you could justify the subsidy on the grounds of external benefits.
Even when the company understood the consumer demand, it failed to respond to the market demands Constantini, GM automakers have continued to lose their market share since s. For example the company did not respond to its increased higher wages while it first competitor, Toyota, was operating at a lower labor cost Selley, This act also opened way for the foreign automaker especially japans companies which were producing more fuel efficient cars Espo, In wake of stiff competition from Japanese cars, the company needs to come up with new operational plan that will include re-negotiation of the labor policies to ensure that the company can pay what it can afford.The Automotive Bailout Essay; The Automotive Bailout Essay.
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Leading up to the crisis There are many theories as to what caused U.S. automakers General Motors, Chrysler, and to a lesser extent, Ford, to fall into economic peril.
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Industrial Relations and Problems at Toyota Kirloskar Motors. GENERAL MOTORS BAILOUT PROBLEM Introduction Founded inGeneral Motors has been one of the largest corporation and the second largest automaker in the. Free Essay: GENERAL MOTORS BAILOUT PROBLEM Introduction Founded inGeneral Motors has been one of the largest corporation and the second largest.
GENERAL MOTORS BAILOUT PROBLEM Introduction Founded inGeneral Motors has been one of the largest corporation and the second largest automaker in the world coming after Toyota.Download