General Motors Corporation (Performance Assessment)

Topics: General Motors, Saturn Corporation, Automotive industry Pages: 11 (3609 words) Published: July 27, 2008

This paper will explain GM’s most pressing challenges. Overcapacity is negatively impacted their financial results, brutal international competition is causing GM to react with target costing strategies, rising fuel prices directly impacts their cash flows and complicates capital budgeting strategies and tactics and their ongoing health care and pension costs continue to color their future earning potential. These challenges will be addressed by using performance assessment measures. The financial assessment measures include net income and their market share value, liabilities of health care and pension benefits, revenues, target costing and capital budgeting. Non-financial measures include customer satisfaction and branding effects on sales volume.

Managers use standards, benchmarks and metrics to assess organizational performance in a variety of settings. Performance measurement is defined as the extent to which actual outcomes correspond to planned outcomes. Management use performance assessment to improve processes, modify plans. Motors Corporation, also known as GM, is the world's largest automaker and has been since 1931. Founded in 1908, GM today employs about 326,999 people around the world. GM manufactures its cars and trucks in 2 countries. In 2005, 17 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Hummer, Pontiac, Saab, Saturn and Vauxhall. GM operates a finance company, GMAC Financial Services, which offers automotive, residential and commercial financing and insurance. General Motors Corporation is primarily engaged in automotive production and marketing, and financing and insurance operations. GM designs, manufactures and markets vehicles worldwide, having its largest operating presence in North America. The Company's finance and insurance operations are principally those of General Motors Acceptance Corporation, a wholly owned subsidiary, which provides a range of financial services, including automotive finance and mortgage products and services. GM markets its vehicles and provides financing for those products through a network of independent retail dealers and distributors in the United States, Canada and Mexico, and through distributors and dealers overseas.

General Motors North America primarily meets the demands of customers inside North America with vehicles designed, manufactured, and/or marketed under nameplates, such as Chevrolet, Buick, Saab, Pontiac, Cadillac, Hummer, GMC and Saturn. The Company, excluding its financing and insurance operations, has approximately 335 locations operating in approximately 40 states and approximately 200 cities in the United States. Of these, approximately 20 are engaged in the final assembly of GM cars and trucks; approximately 30 are service parts operations responsible for distribution or warehousing, and the remainder is involved primarily in the testing of vehicles or the manufacturing of automotive components and power products. .


Based on the GM’s consolidate net sales and revenue, it shown that General Motor Corporation revenue has been falling to $ 192.6 billion in 2005 from 193.5 billion in 2004. GM incurred a consolidated net loss in 2005 of $ 10.6 billion, compared to net income of $ 2.8 billion in 2004. The most significant causes of these results are due to some of the following: •GMNA market share and product mix

As shown on the charts, General Motors Corporation has been underperformed compare to DJIA. In the last 1990’s, GM had regained market share up $ 80 a share. In 2000, the interest went up by the Federal Reserve to quell the stock market and a severe stock market decline following the September 11, 2001 attacks. Due to this factor, it affected a pension and benefit crisis at General motors and many other American companies. The current stock market price of General...
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