General motors 222 2

General motors 222 2 - GM 2/21/2008 General Motors, once...

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GM 2/21/2008 General Motors, once the worlds undoubted leader in automobiles, has recently had a large fall from grace. The company has experienced record losses and is desperately trying to turn their free fall around, to mixed results. As announced by CEO Richard Wagoner in 2005, General Motors is looking to solve the company's problems in four distinct ways: Increasing spending on new cars and trucks; clarifying the roles of each of GM's eight brands; intensifying efforts to reduce costs and improve quality; and continuing to search for ways to reduce skyrocketing health care expenses. GM has tried a number of different ways to try and turn around the company. They have tried to cut benefits for union workers like the United Auto Workers (UAW) but have been relatively unsuccessful. They have ended their disastrous $2.4 billion partnership with Fiat that began in 2000. After some controversy between the companies, GM agreed to pay an out-of-court settlement of $2 billion to completely cut any ties with the European automaker. Thus, the experiment proved to be a $4.5 billion waste for General Motors. One strategy that seems to be working for the automaker is restructuring. It was noted that in 1992, there were 27 different purchasing organizations in North America alone. They have now consolidated to one worldwide organization, providing a competitive advantage by purchasing products in mass quantities, thus getting cheaper prices. There are a few possible alternatives to help solve some of General Motors' problems. One alternative to help GM offer an extensive early retirement/buyout program. A second alternative is to spin off General Motors Acceptance Corporation (GMAC) as a separate entity. A third alternative would be to file for bankruptcy. Finally, they can choose to do nothing. Alternative 1 is to offer extensive early retirements and buyouts to laborers.
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This note was uploaded on 04/11/2008 for the course MATH 126 taught by Professor Brutche during the Spring '08 term at Bowling Green.

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General motors 222 2 - GM 2/21/2008 General Motors, once...

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