Analysis of General Motors Corporation - Research Paper Example

 Analysis of General Motors Corporation The American economy officially went into recession back in December 2007 and ended, again officially, last July 2009. During that intervening period, billions in assets were lost and millions of jobs were likewise lost; some of those jobs are not coming back again. The economic landscape has been changed a lot since then due to what some economists now term as the Great Recession (in comparison to the Great Depression a few decades ago). The recession supposedly ended last July but more additional jobs have been lost than have been added since that time (Clemens 2). Were it not for the government bailouts, the effects of the recession could have been much worse. Billions of taxpayer monies were used to prop up the failing firms on Wall Street as well as on Main Street. Perhaps no other industry represents the industrial might of American power than the car industry but it is one of the worst hit by the recession. The end result was that one of the great generals in American business failed – General Motors Corporation (the other two are General Electric and General Mills). General Motors is an icon for American business and represents one of the great American traditions of owning a car as a sure sign of middle class wealth, success and upward mobility. When General Motors went bankrupt, the government had to step and today represents a near miracle in financial terms because General Motors is being resurrected through an initial public offering (IPO). It is a very remarkable comeback for a fallen giant whose IPO is over-subscribed from a very receptive stock market and part of its success is due to its aggressive advertising campaign. Today, General Motors is one of the fastest-growing brands with an impressive line-up of new models (Vlasic & Bunkley 1). The new model being promoted the most to buyers is the totally electric car called the Volt. A big part of the investor excitement in GM is it managed to sell 1.8 million cars so far this year and is piling up billions in profits. It’s recently launched a series of ad campaigns focused on its latest product model – the Volt. The advertising’s main theme is loyalty and a look to the past by citing the long-tradition of GM. The ad appeals to the patriotic emotions as well as nostalgia of prospective American buyers with the tag line of “Chevy Runs Deep” as the Volt is a new model produced by the Chevrolet division of General Motors Corporation. People who buy GM products are trumpeted as helping preserve American jobs and resurrect GM to its former glory but more importantly, the ad as shown on television tries to let buyers recall the old times when almost every American family aspired to own a General Motors car. The ad visuals showed a typical American family during the early part of this century in the rugged frontier and the ad was intentionally shown in black-and-white to emphasize the fact that Chevys indeed go a long way back. The voice-over cited the long list of GM cars that attained a minimum of 30-mpg (miles per gallon) based on Environmental Protection Agency (EPA) standards but the last car being paraded in the ad which is the newly-introduced Volt claims the Volt can attain a 40-mpg rating but this is not the whole story of the ad itself. The ad claims this 40-mpg is totally electric and therefore can travel on those first 40 miles before using the first drop of gasoline. This is a totally new concept which is intended to astound or awe the consumer and also perk up their interest and curiosity by claiming able to travel 40 miles without using gas at all (You Tube, 2008, 1 min). These latter portions of the ad are intended to arouse the curiosity because people will instinctively wonder how can a car go 40 miles without using gas? The last segments are used to appeal to our rationality because people will naturally ask how a car can accomplish that. A further proof of this appeal to reason is the claim that this is actually a part of the American Revolution. This is actually just an allusion to the new concept of hybrid cars but the Volt is a bit different because it is not a true hybrid at all. The mental revolution is a paradigm shift. Because of the ad’s remarkable claim (going the first 40 miles without using gasoline), it will set people into thinking about what makes this so. The ad appeals to the new generation of buyers who are concerned about the environment and the amount of gas emissions that are released to the atmosphere by the use of cars. When I say new generation, this pertains to the people who are now environmentally conscious (new here means not only the young but also includes older people who are now aware of the dangers of global warming caused by climate change which in turn is caused by too much gas emissions trapped in the upper ozone layers). The ad plays on the buyer’s emotions by showing black-and-white photographs/videos of the old times but then gradually changing bit by bit to show colors as a sign of progress. In fact, the ad claims this is what progress is all about, made possible by a good lineup of models which are all fuel-efficient to help preserve the environment. The new Volt car model is then shown in the middle of a green field with majestic mountains as the background. Because it is totally electric, the ad claims it helps the environment by reducing the need for the traditional combustion engine that is very polluting and harmful to the environment and air quality. But perhaps the only remarkable word or text that is of any significance in the ad is the DAWN shown atop an old-style gas refilling station. The dawn is supposed to represent a new era or beginning and this reinforced with the message earlier of an American Revolution, which in turn is actually a revolution in the way most people think about their cars. I personally prefer hybrid cars because these are less polluting compared to traditional car models. However, one factor going against hybrids is their price which is in the $40,000 range and therefore one should question whether it is worth the investment at that high price. Additionally, hybrid cars only give the impression that less gas is used but when its battery is being charged at home or elsewhere, energy is still being used but just a different type of your usual energy. This time around, re-charging a hybrid car’s battery consumes electricity that is being produced by traditional power plants using dirty energy sources like coal or bunker fuel. In this regard about using supposed clean energy such as from the electric battery, I do think the ad is slightly misleading. This is because it is not possible to move around without using energy and the energy source is just being shifted from the usual gasoline to electricity but the power plants producing this electricity on our power grids are still using old or ancient technology. So the consumer is misled into thinking he or she is using a clean or green car when in fact that is not true. Using a hybrid can be totally green when the electricity used to recharge the battery comes from renewable sources such as wind or solar energy and not from coal, diesel fuel or nuclear energy. The ad of course does not mention where that electricity to recharge the battery comes from and so the claim of being a green car is not totally true. The ad also did not make any mention about the price which is very prohibitive. Ever since hybrids were introduced to the market, consumers were always concerned about the ability of the car to travel long distances. This had been partially solved with the use of the traditional combustion engine when the juice of the battery runs out. The gas engine is supposed to take over to give the car an “extended range” while the battery is out. However, the Volt is a totally revolutionary concept because although it still has the gas engine in it, this engine is used not to produce combustion to provide locomotion but to generate electricity. The Volt therefore can be considered to be a “totally electric” car in this sense because all its power is derived from the battery and not the gas engine and uses one propulsion system only. By their own admission, General Motors vice president Joel Ewanick tells consumers the Volt is designed to address what most potential buyers fear the most about electric cars – “range anxiety” which pertains to the nagging fear that the battery charge will run out while they are driving long distance trips and strand them in the middle of nowhere. The ad appeals to our fears but not by provoking fear to induce a purchase but to reassure us so that we will be confident when driving the Volt (Elliott 1). To directly address this subconscious fear, the Volt is shown in the series of commercials to be on the road and going places (ibid.). Works Cited Elliott, Stuart. New Plugs for an Electric Car. The New York Times. 17 Nov. 2010. Web. 18 Nov. 2010. Clemens, Paul. The Ghosts of ‘Old G.M.’ The New York Times. 17 Nov. 2010. Web. 18 Nov. 2010. Vlasic, Bill and Nick Bunkley. Chrysler Falls Behind as G.M. and Ford Recover. The New York Times. 17 Nov. 2010. Web. 18 Nov. 2010. You Tube. Chevy Volt Ad. 8 Aug. 2008. Web. 18 Nov. 2010. Video. Read More