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History

History. Founded in 1908 by William Durant 1911- First auto company on NYSE 1927- took lead of industry from Ford. History. 1970’s-80’s Japanese gain market share GM tried to match smaller car styles 2000’s- Recalls and Strikes. History. 2008: 5,000 salary layoffs

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History

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  1. History • Founded in 1908 by William Durant • 1911- First auto company on NYSE • 1927- took lead of industry from Ford

  2. History • 1970’s-80’s Japanese gain market share • GM tried to match smaller car styles • 2000’s- Recalls and Strikes

  3. History • 2008: 5,000 salary layoffs • 2009: Government Bailout • Ch. 11 Bankruptcy • Motors Liquidation Company • 2010: Rebirth, Restructure, • Largest IPO

  4. History • Present Day: Daniel Akerson trying to get GM back on top. • Greener Cars • Repay debt to the government

  5. Government Interaction • Federal Emissions Requirements • Catalytic Converter • Safety

  6. Technological Advances • Plastic/Carbon Fiber Body • OnStar • Hybrid Cars • Hydrogen Powered cars

  7. Industry Analysis • Barriers to Entry • High • Intensity of Rivalry • Extremely High • Bargaining Power of Suppliers • Low • Bargaining Power of Buyers • Low • Substitutes • Low

  8. Strengths • High Liquidity • Allows them to be more flexible in the future • Strong Global Presence • New found focus on individual brands • Increased product quality

  9. Weaknesses • Customer Loyalty • Stigma from the bailout • “Holes in the line up” • Declining US Market Share • United Auto Workers

  10. Opportunities • Emerging Markets • South America • China • Alternative Fuel Technologies

  11. Threats • Volatile Economy • Raw Material Prices • Oil Prices

  12. Geographic and Economic Factors • Headquarters in Detroit, Michigan • Became global in the 1920s • Now manufacture vehicles in 31 countries

  13. Four Geographically-Based Segments • GM North America • GM Europe • GM South America • GM International Operations

  14. Total Production Volume for Each Geographic Segment

  15. Automobile Industry Factors and Business Cycle • Retail sales fluctuate according to season • Production varies each month • Changeovers occur often throughout the year • New market entries, vehicle models • Business cycle depends on general economic conditions and consumer spending

  16. The Economy • The recession had a negative effect on GM’s United States Market • It also affected factors that determine consumers’ buying decisions • E.g. Price, quality, available options, style, safety, reliability, fuel economy, and functionality

  17. Financial Help From Congress • G.M. Files for Bankruptcy • Dramatic Turnaround • Profitability Helped by Tax Breaks Carried Over Through Bankruptcy

  18. A Slow Recovery • G.M. Announces Still Losing Money in November 2009 • 2010 Turnaround -Rebuilding Operations -Increased Sales - full-year profit was equal to $2.89 a share

  19. Focus Factors • Competitive Cost Structure • Cleaner Balance Sheet • Stronger Liquidity

  20. 2011 Earnings: 1st Quarter • G.M. made $3.2 Billion in the 1st Quarter -5th Consecutive Profitable Quarter • Sales

  21. Competitors and Their Reactions to Economic Conditions • In 2005 the auto industry rides a new trend of “Employee Prices for Everyone”. • 2005 is a tough year for both companies. • “Way Forward” • GM looks for government help • GM emerges from bankrupcy • Ford rebuilds workforce

  22. GM in the Future • Now -Akerson Keeping the Ship Upright • 5 Years -New CEO -Hydrogen Cars -Emerging Markets • 20+ Years -Hydrogen Gas Stations -Staying Within Their Limits

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