General Motors
Essay Preview: General Motors
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General Motors (GM) is the worlds largest automaker. Many major corporate events have occurred in the history of this company. Like any other business GM has its strengths, weaknesses, opportunities, and threats.
The company was founded in 1908 and has been the global industry sales leader since 1931. Its vehicles are sold in 200 countries. GM employs about 325,000 people. They have manufacturing operations in 32 countries. All automotive operations worldwide are brought together in a single organization, the GM Automotive Operations. They consist of GM North America (GMNA), GM Europe (GME), GM Latin America/Africa/Mid-East (GMLAAM), GM Asia Pacific (GMAP).
GM set industry sales records for trucks and SUVs. They sold more full-size Pickups than any other manufacturer for a record 11th time in 12 years. They have more fuel-efficient cars and trucks (30+mpg) across more vehicle segments in US than any other manufacture (foreign or domestic). Market share statistics from the 2004 annual report are as follows:
GMAP 5.2% up (China is GMs second largest market at 9.3%)
GMLAAM 17.4% up (GM is #1 in Brazil, Doubled its share in Argentina & Venezuela)
GME 9.5% up (Some loss in Europe due to unfavorable exchange rates)
GMNA 26.7% down .7%
US Trucks 29.0% down 1%
Total Global 14.5% down 1%
Truck sales represent 60% of GMs total US Vehicle sales which is up 1%. GM expects 30% of its sales volume will come from new vehicles. GMs current products that fall into the Problem Child category of the BCG Matrix include, foreign brands such as Holden, Vauxhall, and Opel, and full-size trucks and SUVs due to their large consumption of expensive fuel. The products that fall into the Star category consist of the hybrid vehicles such as the 2006 Chevy truck, and smaller SUVs and crossover vehicles such as the current Pontiac Vibe. The coming 2007 Saturn Vue Hybrid will be a great Star. Also, GMs GMAC division is in the Star category. In the Cash Cow category is the parts and service divisions of GM. They have a large market share but it is not growing due to GMs overall shrinking market share. Support for record sales of product will be a great source to harvest to fund their development of their future alternative fueled vehicles that are in the star category or moving products from the Problem Child category to Stars.
GMs history falls back for more than a century, but the General Motor Trucks Company wasnt organized until 1911. In the early 20th century, GM was able to achieve a great deal of accomplishments. Their many accomplishments include their GM Rapid, which was the first truck to ever conquer Pikes Peak, Yellow Coach, and their contribution of converting 100% of its productions to the effort of World War II .
Later, in the 1950s and 1960s, GMs Allison Division introduced the first fully automatic transmission for both trucks and buses. At that time, Chevrolet introduced the small block V-8 engine on their 1955 trucks. The TurboCruiser, which was the worlds first gas turbine bus, was also introduced, as well as the El Camino, which was designed to combine the big car comfort with the utility of a pickup truck.
GM finished out the century by forming joint ventures with Isuzu Motors, producing manufacturing operations in Cairo, Egypt and assembly plants in Kairouan, Tunisia. They continued their operations by creating their first motor home, and even launching the Hummer H2, and Hummer H3. They polished up their almost 100 years in formation by creating the worlds first full-size hybrid truck, the Chevrolet Silverado.
Strengths of GM include the fact that they are the industry leader in safety, innovation, technology, and marketing. They have also earned many awards over years. GM has led the way in safety by introducing OnStar, and manufacturing the first closed body styles, air cushion restraint systems, and daytime running lights. Innovations and technology include HydroGen1 fuel cell vehicles, Displacement-On-Demand, and hybrids. There are many marketing programs and campaigns that have helped GM in their success. GM created a new diversity marketing and sales organization to focus on the womens market and growing markets of African-Americans, Hispanic-Americans, and Asian-Americans. Marketing programs, such as “Keep America Rolling” and “GM Employee Discount for Everyone,” have been highly successful. In 1996, the company launched a website to provide an overview of its products and service line. Online shopping and buying service is also available through GM BuyPower. GM was the official car and truck sponsor in the 1996 Olympics and will also be a sponsor in the 2006 Olympics. Currently, the “Only GM” campaign focuses on brand-building and quality awareness. GM has won many awards and recognition. In 1912, they won the Dewar Trophy for most important automotive contribution of the year. GM received the highest grade of any domestic or foreign auto company in the 2004 NAACP Consumer Choice Guide and Report Card. In addition, they received eight “Most Dependable” awards. J.D Power and Associates Initial Quality Study named GMs Oshawa plant as the auto industrys best plant in North/South America.
Along with GMs many strengths are the weaknesses that are leveling off GMs success. GMs high costs are due to their pension plans, which are currently $7.5 billion in arrears, the high costs associated with their employee health care programs, high US labor costs, their extensive research and focus on Hydrogen Fuel Cell Technology, outsourcing, American made vehicles negative image, numerous recalls that continue to escalate concern for safety, recognized along with Ford and Chrysler as the worst automakers for developing energy efficient vehicles, loss of $1,227 for every vehicle sold in 2005, and the worse news for GM is that they are no longer #1 in sales and it has been predicted they will lose their #1 spot in manufacturing, globally. Their biggest problem, however, is that GM has too many makes and models, given its share of the market
GMs turn around plan includes selling a controlling stake in their highly successful financial division, GMAC. Also, major health care revisions, structural costs needs to be reduced by $6 billion a year, reduction of $1 billion in material costs per year, cut salaried staff by 6-7% this year, cut at least 30,000 hourly jobs by 2008, close an estimated total of 15 facilities and plants by 2008, lower prices on US vehicles