StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Financial Losses for GM Auto Manufacturers - Assignment Example

Cite this document
Summary
The author examines the factors contributing to losses of GM and states that the company suffered a devastating loss in 2005, brought about by the bankruptcy of Delphi Corporation, one of its most important suppliers, along with accounting errors at GMAC, its financial arm.  …
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER91.3% of users find it useful
Financial Losses for GM Auto Manufacturers
Read Text Preview

Extract of sample "Financial Losses for GM Auto Manufacturers"

MEMO June 28, 2006 Subject: Progress Report: Financial Losses for GM Auto Manufacturers Time Period: June 12, 2006 - July 18, 2006 Work Completed Factors Contributing to Losses Research to date indicates that General Motors (GM) suffered a devastating loss in 2005, brought about by the bankruptcy of Delphi Corporation, one of its most important suppliers, along with accounting errors at GMAC, its financial arm. This is an issue that needs further historical study to see exactly why GM was not prepared for these occurrences.

Present short-term efforts to recoup GM's effort to increase their market share seems like a desperate bid to plug the dike with short-term incentives related to the high cost of fuel and its focus on the company's On-Star computerized system. In the meantime, other areas such as decrease in customer satisfaction and employee loyalty are weakening the structure. Studies so far show an increase in job layoffs and lack of foresight on the part of GM on what customers want. More research is needed on whether GM is actually making an effort to improve in these areas and what programs they have in place.

Areas to be explored Customer and employee satisfaction: The recent effort on GM's part to save on health costs in an agreement with United Auto Workers union will not increase employee incentive since the effort adversely affects the employees by increasing co-pay for doctor's visits and pharmacy. In the growing Asian and European markets, GM has not kept up, focusing on light trucks when customers were more interested in owning cars. Further research will determine how GM plans to change its focus.

Brand visibility: Asian and European auto brands have long been established as being well made and long lasting, with American brands suffering by comparison. At one time, American automakers pushed for customers to "Buy American," a patriotic ploy that increased market share for GM until Asian and European companies opened companies in America. Even so, foreign cars continue to be considered superior. A study of GM's research and development efforts will tell the story on future efforts. Global marketplace: Even though GM has addressed the Chinese market with Shanghai GM, problems have already been experienced in the company, with recall of Buick models.

The saving factor here is that there was a recall of foreign brand cars as well. The future of GM depends on attention to: 1. Positive brand visibility 2. Global interaction through partnership and mergers 3. Increasing customer and employee satisfaction Work remaining As noted in the progress report above, several areas need further study. First, the history of General Motors from its beginnings to its phenomenal success in the 1990s should set the foundation for where GM is at present and what it must do in the future.

In addition, comparisons with other American automakers and the efforts being made to increase the customer base must be made. Once this foundation is put in place, it is necessary to look beyond the American market and learn what GM has done to meet foreign competition and just how successful they have been so far in the 21st century (Appendix A). Toyota is obviously making a concerted effort to reach No. 1 in the automobile market, and the final report will show whether GM can maintain its lead and resolve its issues in the near future or whether it will not only lose to Toyota but be taken over by them as well.

Appendix A: NPR Study in 2005 by Diane Geng By the Numbers General Motors Toyota Best selling vehicle In U.S. Chevrolet Silverado 680,768 sold in 2004 Toyota Camry 426,990 sold in 2004 U.S. sales in 2005 4,454,386 down 4.3% from 2004 2,260,296 up 10.1% from 2004 Profitability per vehicle Losses $2,331 per vehicle Makes $1,488 per vehicle Worldwide sales in 2005 9.2 million 8.2 million Global market share In 2005 14.2% down from 14.6% in 2002 12% up from 10.6% in 2002 http://www.npr.org/news/specials/gmvstoyota/

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Financial Losses for GM Auto Manufacturers Assignment”, n.d.)
Financial Losses for GM Auto Manufacturers Assignment. Retrieved from https://studentshare.org/finance-accounting/1532555-general-motors-essay
(Financial Losses for GM Auto Manufacturers Assignment)
Financial Losses for GM Auto Manufacturers Assignment. https://studentshare.org/finance-accounting/1532555-general-motors-essay.
“Financial Losses for GM Auto Manufacturers Assignment”, n.d. https://studentshare.org/finance-accounting/1532555-general-motors-essay.
  • Cited: 0 times

CHECK THESE SAMPLES OF Financial Losses for GM Auto Manufacturers

Impact of Financial Losses for GM Auto Manufacturers

hellip; The days when American companies monopolized the auto industry in the United States are over, and the global aspects of big business have taken over the marketplace. General Motors (GM) began its climb to success in 1908, and as the twentieth century progressed so did the automobile industry.... In a recent PBS interview, GM CEO Rich Wagoner noted that restructuring is taking place in the company in an effort to "compete in the global auto industry and global economy" (Solman, 2006, par....
8 Pages (2000 words) Essay

Ford and G.M. Lose Grounds to Imports

These “Big Three” auto manufacturers produce both a range of auto products from cars to… This traditional grip of the market share of the products of the auto industry has come under threat from the Japanese auto manufacturers of Toyota Motor and Honda Motor Ford and G.... These “Big Three” auto manufacturers produce both a range of auto products from cars to light trucks, and a have held a major share of the sales of such auto products in the United States of America....
2 Pages (500 words) Essay

Economy Affection on the Automobile Industry

Car purchasers need a loan to buy cars, dealers need a loan for keeping the inventory in a good size and the manufacturers also need assistance from the banking sector.... Most of the automobile manufacturers are struggling hard in order to survive in the market.... “In 1990, Mexico exported around 180,000 vehicles, whereas in the first 11 months of 2002 manufacturers in Mexico have sent 1.... Not only Mexico, the leading car manufacturers in Japan, America and Germany were also recorded huge growth in their sales before the unexpected crisis began to affect the whole world....
7 Pages (1750 words) Case Study

Organizational Change Induced by Vertical Integration

Through the merger, General Motors would obtain sufficient supply of auto bodies and innovative annual change of car models from Fisher Brothers a company that specialized in the manufacture of coach bodies.... The change that occurred at General Motors when the company merged with Fisher Brothers was vertical owing to the financial might that General Motors exhibited....
6 Pages (1500 words) Essay

Competitive Position of General Motors Europe

This attracted the auto manufacturers from Asian countries who were prepared for change and could cater to this segment.... hellip; They lost their position in the auto industry as they failed to recognize the opportunities that the market presented and this allowed the Asian manufacturers to surge ahead.... This forced the automobile manufacturers to operate their plants to full capacity which proved to be a wrong strategy in due course.... The auto-industry in Europe experienced upheaval due to changes in the macro-environment....
8 Pages (2000 words) Case Study

US Automobile: On Brink

This specific case has been true for automotive industry, gm and Chrysler were once considered to be the global automotive brand.... Unfortunately, it is not only America which is suffered due to this factor, rather European-based automotive giants have suffered huge losses and therefore were prompt enough to settle in India and China, to ensure gain and profitability with reasonable efforts.... nbsp;… As the discussion highlights, the US reign supreme in the technological and financial avenue, however for the sake of profit-making all such units were outsourced, bringing more revenue to the country but lesser to its people....
8 Pages (2000 words) Article

General Motors Value Chain

But when a group of customers is concerned they not only have bargaining power on the dealers but they also have significant bargaining power on the manufacturers.... Bargaining power of buyers: As far as individual customers are concerned they might have some power to negotiate with an automobile dealer in a particular area as they can easily change the auto dealer and there is hardly any cost involved in it.... gm cars are manufactured in different countries....
15 Pages (3750 words) Case Study

The Effect of the Impact of the Recent Recall of Toyota Defective Cars

The paper “The Effect of the Impact of the Recent Recall of Toyota Defective Cars” emphasizes the company's short-run loss of revenue due to costs of recalls and repairs, the discounts and mortgage subsidy to counter global recall, while the demand for these cars will not change significantly....
8 Pages (2000 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us