GENERAL MOTORS BANKRUPTCY CASE

General Motors Bankruptcy Case



General Motors Bankruptcy Case

The History, Development, and Growth of the Company over Time

An Ongoing Crisis for Thirty Years

If the explosion of the crisis was sudden, the causes are by far and are part of an ongoing process of crisis and restructuring at work since the 80's. In 1979, GM became the largest employer in the United States, with 618,365 employees, workforce of 853,000 people worldwide. Since then, despite the expansion of the firm and profit growth is a continuous fall of the workforce. There were only 330,000 in 2005, before the social of 2006 which led to the departure of 30,000 workers. Even global company like General Motors is still very dependent on her home country. The distribution of its turnover in 2008 was divided between the United States (55.5%), North America (8.1%), Europe (19.6%), Asia Pacific (8.6%), and Latin America (7.4%).

Auto sales fell in the United States to their lowest level in 30 years. After reaching 16 to 17 million cars per year on average during the past decade, vehicle sales fell to 13 million in 2008 and will be below 10 million this year.

This may seem a paradox in the era of globalization, but Detroit's car factories produce only for their home' markets of North America, the United States and Canada. Indeed, 4x4 and other SUV produced since the 80's in Detroit essentially the center of the country, not even the east coast (New York) and West (California) (Henry, 1994).

SWOT Analysis

Strengths

GM has a leading market position in different geographies in the world. The company is a leader in the North American automotive market with a share of 18.2%. In the US, GM holds the number one market position with a share of 18.8%. In Europe, the company holds the number five market share at 8.8%.

In addition, GM has a strong strong-brand. The company also has a wide portfolio of regional brands. For instance, in North America, the company sells its products under Buick, Cadillac, Chevrolet, and GMC brand names. In Fy2010, Chevrolet was GM's top selling brand in North America. The company sold 1,866,000 Chevrolet branded vehicles, followed by GMC (411,000), Buick (168,000), and Cadillac (156,000). In Europe, GM sells its products under the brand names of Opel, Vauxhall, Chevrolet and GM Daewoo.

Weaknesses

GM announced recalls that cover some of its most popular models due to manufacturing and design problems. For instance, in May 2011, the company recalled more than 4,500 Chevrolet Colorado and GMC Canyon pickup trucks due to defects in the wipers. In the same month, GM recalled 154,112 Chevrolet Cruze compact cars to inspect steering shafts. In March 2011, the company recalled 10,179 Buick Lacrosse and Cadillac SRX vehicles due to a software defect. Similarly, in February 2011, GM recalled 44,000 Cadillac CTS' sedans for a potential wheel problem.

Opportunities

The global market for passenger cars and light commercial vehicles grew sharply in 2010. The volume increased from 63.8 million in 2009 to 69.6 million units in ...