General Motors Failure Analysis

Topics: Stock market, General Motors, Stock Pages: 3 (884 words) Published: November 14, 2012
Business & Management
What factors led to General Motors' 75% drop in share price over 10 years? General Motors, like many corporations in the automobile industry, are struggling more than ever through the economic downturn. However, it is imperative that one consider the many other factors that has impacted General Motors to the extent that it’s stock declined by more than 70% over an eight year period. This dramatic descent exposes the troubling cracks within the company’s apparently fragile framework, and it thus becomes essential for the company to gain an understanding of its problems and subsequently form a motion going forward that would solve these underlying issues. This self-awareness and confrontational approach to its issues, a sharp contrast with the denial and ignorance the company has been described as having during it’s seemingly perpetual freefall in value, could prove to be the company’s second saving grace after the substantial bailout gifted by the Obama administration.

The most crippling of factors adversely affecting the company is the ruthless competition it is up against within both its domestic and foreign markets. Although it can be said that General Motors was for an extended period its own worst enemy in numerous mistakes that only resulted in tarnishing its image, it can equally be said that the near flawless performance and efficiency of its Japanese and German adversaries have contributed significantly to their drop in market share. This issue is primarily revolving around quality and reliability problems that have risen from the company’s lack of direction and vision. At Bob Lutz’s (former Vice Chairman at GM) own admission the company failed to implement adequate quality control and assurance measures during the late 90’s, early 2000’s and onwards, which were sacrificed for the sake of meeting production output quotas. This leads on to the other flaws in its design department, where many if not all of its vehicle line-up were...
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