General Motors Company was founded on September 16th, 1908 by William C. Durant. Durant was previously the owner of a company which led the horse drawn vehicle industry. When General Motors was founded, the headquarters was initially in Flint, Michigan. General Motors was a holdings company which quickly collected more than twenty different motor companies. Companies such as Oldsmobile, Pontiac, Cadillac, Buick, Opel(a German auto company), Chevrolet, and several others. Eighteen years after the founding of the company, December 20th, 1916, it began to publicly trade stocks.
Over eight decades, General Motors implemented new ideas which revolutionized the idea of the car, propelling it to quickly become the leaders in innovation. General Motors was the first to create a production car fitted with airbags, and in 1971, it became the first to announce that their cars could run on low-lead or unleaded gasoline, in response to the new eco-friendly movement in that time period. In 1974, General Motors car brands were fitted with catalytic converters, which helped to greatly reduce the emissions from the car, which was again done to help with the quickly polluting atmosphere.
However, even with GM’s contribution to the advancement of the auto industry, the company was hungry to expand. Globalization, the act of reaching a worldwide scale, began in 1982 with the opening of an auto complex in Zaragoza, Spain. This auto complex began production of the fuel-efficient Opel Corsa. In addition to the opening of auto complexes in Spain, GM also began to reach for the growing economy countries such as China, which is now the largest auto producer and consumer in the world, as well as India. By 1995, more than 3 million units been sold outside of North America.
The economy took a turn for the worse beginning in 2008, and by 2009 General Motors was not only faced against pressure from competitors, both foreign(Toyota and Nissan) and domestic(Chrysler and Ford), by a crippling economy which destroyed the middle class, and effectively wiped out a large portion of General Motor’s customer base. GM’s stocks dropped below $. 75 per share during this time period. On June 2nd 2009, General Motors filed for Chapter 11 bankruptcy, but was soon given government bailout money, “Under conditions that the company further accelerate a tough
restructuring of its US operations that had been underway for several years. ” With the intervention of the government, the US treasury took 60 %( that number has since been reduced to 20%) of the total shares from GM, which essentially meant that US tax payers held 60% of the stocks of GM. Today, General Motors has made a substantial recovery from where it was at the height of the rescission in 2009. This calendar year, General Motor’s one year high in the stock market was $30. 60, and the one year low was $18. 80.
At the moment, the current stock price for General Motors is $28. 63. Their recovery is due in part because of their tough restructuring carried out by their board of directors, which includes Daniel F. Akerson, the Chief Executive Officer(CEO) and chairman of General Motors, Stephen J. Girsky, the Vice Chairman, David Bonderman, the Co-founding partner and managing general partnerat Texas Pacific Group(a globally recognized investment firm), and Thomas M Shoewe, the former vice president and Chief Financial Officer at Walmart.
In addition to members on the board, shareholders, and the executive council also helps to make decisions for the company in order to fulfil the company’s objective to create the most profit. With the decades of success before and after the banking crisis, General Motors was able to create manufacturing factories in numerous locations. There are factories spread all across the globe, in Australia, North America, Asia, Europe, Africa, and South America, where car parts are manufactured to be shipped to the US to be assembled in the dozens of assembly plants spread out across the country.
Though out almost a century of operations, General Motors has constantly been changing in order to meet the needs of the customer. One of the consumer interest has shifted time and time again, from the demand for more power and sleekness in the 60s, more ecofriendly cars in the 70s and 80s, to more affordability and power in the 90s. General Motors has constantly been trying to keep up with the ever changing demands of their customer base, which is usually focused on the middle aged man(30-45) looking for a car with some kick and thrill. The bankruptcy also induced many forced, but needed changes at General Motors as well.
As part of the “tough restructuring” changes, General Motors underwent seriously rigorous changes, forced to lay off more than 100,000 jobs, closedown more than 2,000 dealerships, and cut loose brands like Hummer, Pontiac, Saturn, and Saab from the holdings. Additionally General Motors began cutting bonuses for over 25,000 employees, and froze their pay until 2012. They also took on as little debt as possible, and as part of the government bailout deal, General Motors is required to only pay a minimum amount of taxes, in order to allow the company to heal and regenerate itself.
To add to this barrage of cost cutting, General Motors also shut down many manufacturing plants in Germany as well as England, and even went as far as changing the television ad campaign from “Chevy Runs Deep” to the new hopeful tagline “Find New Roads” in an attempt to connect with consumers on a global scale rather than targeting just the consumers in the US. One of the more recent changes they have made in order to provide better customer satisfaction was hiring a new Vice President for Global Quality and US Customer Experience, who in an interview said that she wanted to make it a point to “be the leaders in customer experience.
” Even with the bankruptcy, GM was able to hold it their own against their competitors in both the car world as well as the truck world. The Chevrolet Silverado was the Motor Trend’s Truck of the Year in 2011, however, the Ford F-150 has recently taken the title back. However, even without the title for this year, it can be said in the past that the Chevrolet brand has largely dominated the MTTY since 1979. In the car world where fuel-efficiency is key to success, the Chevy Volt won Motor Trend Car of the year, taking it from their competitors at Ford.
However, since the stock crash of 2008, public approval of the company has been dropping, due to the fact that GM’s main domestic competitors, Ford and Chrysler, have been using their ability to pay back the government borrowed money, or in the case of Ford, not taking government money at all, as an advertisement scheme to lure customers into buying cars that they know will be supported by a strong company. General Motors is not able to play this card, because still today, GM is expected to not payback their loans anytime soon, as more than $30 billion is still needed to be paid back.
Nonetheless, General Motors is again on the rise, and as the largest automotive company in the world, it will most likely gain back what influence it lost in the bankruptcy in 2009. General Motors is a company which prides themselves on their innovations, as well as their ideas, and hope that one day, they can again become the leaders in the automotive industry. Citations General Motors. "Our Company. " Gm. com. General Motors, 2013. Web. 21 Mar. 2013. <http://www. gm. com/company/aboutGM/our_company. html>. General Motors. "Corporate Strategy.
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