Corporate Recovery. General Motors. Clive’s Comments An Excellent presentation with good research. Interestingly presented. All gained from this. Well Done…. Magda Kruszewska Alex García- Mussons Nitai Anidjar. Index. History of GM Why General Motors went bankrupt
Innovation & Challenges: 2000-2008
Rebirth: 2009-Until today\'s General Motors
Bad financial policies
Very high labour costs
Rising competition from foreigner car makers
Failure to innovate
The collapse of the American economy & Freezing credit
Rising fuel prices
In 2006, liabilities have exceeded its assets at its balance sheet.
The financial situation started to get worse every year
Unmanageable proportion of the costs of contracts that provide lifetime benefits to the members.
Inability to keep the company afloat.
Toyota takes away part ot GM’s market share.
Toyota was able to built cars faster and at lower cost
Drop of sales
General Motors focused too much on finance and forgot about building better vehicles.Didn’t innovate
in quality and value
Competition beat them
No more confidence from banks to customers
Companies like GM found it almost impossible to raise funds or borrow from the market to keep going belly up.
Oil prices rise
In 2008 gasoline prices doubled
Less consumers are prone to buy cars
▪ Lobby for less regulations
▪ Always consider the cost of petrol to
the consumer(price petrol)
▪Environmental standards (Corporate
Average Fuel Economy -CAFÉ)
Companies shoulddevelop more cost effective pensionand health careplans for retired former employees in order to reduce and maintain legacy cost
market and produce goods that meet the needs of said market
relationships with the company
and it’s management
Table shows the change in auto sales by manufacturer in terms of year-over-year sales for 2008 to 2009 and for 2007 to 2009