Comparison and Contrast of General Motors and Toyota Motor Thomas Hong, Ph.D. The Impact of Technology on Organization University of Phoenix November 12, 2007
General Motor and Toyota Motor Introduction
This paper seeks to compare core and enabling technologies of two organizations in the automobile industry. General Motors Corporation experienced a crisis that recorded another operating loss of $7,668 million during the fiscal year of 2006, while Toyota Motor Corporation recorded an operating income of approximately $19 billion during the fiscal year of 2006, an increase of 19.2% over 2005. The net profit of Toyota was approximately $13.9 billion in the fiscal year of 2006, an increase of 19.8% over 2005. It is interesting to understand why one company is struggling to survive with such losses, while the other is generating profits every year. This paper further analyzes contrasting strategies of core and enabling technologies between two organizations that may result in profit or loss. General Motors‟ problems are significant beyond those directly involved. If GM fails, it will not only have a huge social, psychological, and economic impact in the US, where it is an iconic automobile manufacturer, but such a failure would also have a negative impact on the US economy and adversely affect other economies. Thus, the failure of General Motors would have world-wide repercussions. Comparison and Contrast of General Motors and Toyota Motor General Motors Corporation History General Motors (GM) was founded in1908 in Flint, Michigan, as a holding company for Buick, then controlled by William C. Durant, and acquired Oldsmobile later that year. Durant brought in Cadillac, Elmore, Oakland (later known as Pontiac), and several others. In 1909, General Motors acquired the Reliance Motor Truck Company of Owosso, Michigan, and the Rapid Motor Vehicle Company of Pontiac, Michigan, the
General Motor and Toyota Motor predecessors of GMC Truck. Alfred Sloan was chosen to take charge of the corporation
and led it to its post-war global dominance. This unprecedented growth of GM would last through the late 70's and into the early 80's. The company continued its international expansion through the establishment of General Motors Overseas Operations in 1938, which oversaw all vehicle manufacturing and marketing outside the US and Canada. The company continued its growth in the 1990s. GM Core Business General Motors Corporation (GM) is primarily engaged in the development, production, and marketing of cars, trucks, and automobile parts, and it is also engaged in finance and insurance operations. GM primarily operates in North America and Europe where headquarters are located in Detroit, Michigan, and employs 280,000 people worldwide (Marketline, 2007). Marketline reports that GM recorded revenues of $207,349 million, however the operating loss of the company was $7,668 million during the fiscal year of 2006. GM Core Technologies Each of the GM automotive divisions are targeted to specific market segments and despite some shared components, each distinguishes itself from its counterparts with unique styling and technology. The GM strategy for core technology is to share components and common corporate management to create substantial economies of scale while the distinctions between the divisions create an orderly upgrade path, with an entrylevel buyer starting out with a practical and economical Chevrolet and eventually moving through offerings of the different divisions until the purchase of a Cadillac (Fine, & Whitney, 1999).
General Motor and Toyota Motor Manufacturing Automation Protocol (MAP) is an open-systems interconnection standard for programmable devices of different vendors in a factory environment. The specification is sponsored by General Motors. MAP enables high-quality Computer
Integrated Manufacturing (CIM) in each individual "cell", improves information...