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The Tale of the Largest Automakers GM vs. Toyota

The Tale of the Largest Automakers GM vs. Toyota. Team: Captain Crunch Chane Porter, Ryan Paul, Ashley Raderstorf, Brent Prenger. GM the Beginning. Founded on September 16, 1908 William “Billy” Durant Founder First Automobile lines: Oldsmobile, Cadillac, Elmore and Pontiac

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The Tale of the Largest Automakers GM vs. Toyota

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  1. The Tale of the Largest AutomakersGM vs. Toyota Team: Captain Crunch Chane Porter, Ryan Paul, Ashley Raderstorf, Brent Prenger

  2. GM the Beginning • Founded on September 16, 1908 • William “Billy” Durant Founder • First Automobile lines: Oldsmobile, Cadillac, Elmore and Pontiac • Main factories in Flint, Michigan

  3. Expansion • Soon Set up GM Europe • Opened 20 new manufacturing facilities • Surpasses Ford as leading Automaker • Survival through The Great Depression

  4. WWII to Present • Helped both Allied and Axis • First to dabble with Unleaded fuel • Helped with Lunar Roving Vehicle • More Vehicle Lines: Hummer, Saab and Saturn

  5. Toyota the Beginning • 1933 Automatic Loom new direction • Originally pushed by gov’t for Domestication • Founder Kiichiro Toyoda • 1934 Model A1

  6. War and Aftermath • Built trucks in war • Lost most of workers • Resumed production 1947 • 1956 Toyota Crown Sent to U.S.

  7. To the present • 1965 Best seller Corona • 1970’s Best-Selling Import • 1980’s First factory in U.S. • 1990’s new vehicles catch eye • 2007 World’s Largest Automaker

  8. Financial Outlook • Liquidity • Efficiency • Profitability • Solvency **Note: Toyota’s fiscal year ends in March and GM’s fiscal year ends in December**

  9. Liquidity/Efficiency • Both quick ratios are less than 1 • Cannot pay back short-term liabilities • Inventory Turnover • Days Sales Outstanding • GM Policy • Toyota Policy • Fixed/Total Asset Turnover

  10. Profitability • Toyota Net Income $14 Billion • GM Net Loss $38 Billion • Gross Margin • Profit Margin • ROA and ROE not very telling here due to huge difference • Book Value/ Common Share

  11. Long-Term Outlook: Toyota • Financed by 2/3 debt • Times Interest Earned: 5.04

  12. Long-Term Outlook-GM • Has more liabilities than assets resulting in negative equity • Debt Ratio 1.25 • Times Interest Earned -1.10

  13. Financial Summary • The ratios tell us Toyota is zooming past GM • 2005 GM reported almost twice as many assets and liabilities as Toyota • 2007 Toyota reported almost twice as many assets and liabilities

  14. General Motors Struggle with change Lags in technology Lags in special features for cars Management and production separate Toyota Always changing Adds new features/models Fully integrated management and production system Toyota Production System Production

  15. General Motors No formalized guidelines for managers to follow Managers can control anything Toyota Toyota Way Managers accept problems and attempt to cope with them Management

  16. General Motors Struggles with change Viewed as new Hyundai All ads now contain “Mark of Excellence” “More bang for your buck” Toyota Constant change Marketing to Generation Y Making a division between company and brands– Example: Now- Camry; Past- Toyota Camry Marketing

  17. Toyota Sales Passes GM • General Motors first-quarter sales dropped across the globe by less than 1 percent • Toyota sales were up 2.7 percent during the same period • Toyota sold 2.41 million vehicles and GM sold 2.25 million in the first three months of the year

  18. Needed for successful GM • More efficient to be successful • Must return to lean productivity • Target 4 of 20 assembly plants to slim down • Trim 1 million cars or 20% of it’s capacity

  19. Needed for successful GM future • More responsive to consumer demands • Executives wrongly predicted comeback in family sedans • Failed attempt at cross-over SUV with Pontiac Aztec

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