What Gm Needs to Do for Future Growth.

Topics: General Motors, Automotive industry, Chevrolet Pages: 6 (2071 words) Published: October 26, 2009
Chevrolet Corvette 1969 Image Source (1)
GM and its strategic partners manufacture cars and trucks in 34 countries, in various brands and configurations: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. United States is GM's biggest market, followed by China, Brazil, the United Kingdom, Canada, Russia, Germany and India. General Motors Company obtained operations from General Motors Corporation on July 10, 2009. A sequence of slip-ups and mishaps led GM into bankruptcy. GM was unable to stop these incentives because competitors weren’t letting go either. One mammoth misstep was that GM scraped its program to develop an electric car, EV1. GM could have lead in this hybrid car market and offered green cars to the ever-increasing global market. By evaluating the above reasons GM should have filed for bankruptcy much earlier, as the world market was still strong and could have immersed the downfall better. Initial plans were set to produce 200,000 vehicles a year, for which Toyota would provide the main components, NUMMI would provide stamping and assembly operations, and other parts and components would be provided by suppliers in the United States. Production would begin with a compact car that Toyota sold and produced in Japan named Sprinter, but in the US it would be named Chevrolet Nova. Even Toyota was eventually impressed with NUMMI’s operations and decided to begin producing its famous Corolla FX-16s at the plant to be sold directly through its own Toyota dealerships. The experience for General Motors was mixed; sales for its Nova model were not going well, production capacity at NUMMI plant had been cut from 600 to 400 cars daily. Toyota only would let GM produce four-door models, in order to avoid conflict with its two-door Corolla. Nevertheless GM was working hard to put into practice lessons cultured from the plant, with a Technical Liaison Office at the plant documenting what was being learned at the NUMMI plant for realization at other GM plants in New Jersey and Delaware, where its new Berretas and Corsicas were being produced. For Toyota, this was its first major manufacturing investment in the United States. It learned about the US automotive market than from its biggest and most experienced car manufacturer GM. Toyota learned how to adapt its famed Toyota Production System to work with US suppliers, US government regulations, and, most importantly, the UAW. After 2 years of alliance with GM at NUMMI, Toyota invested in its first wholly owned plant in the USA; this new plant in Kentucky eventually became Toyota's largest outside of Japan. It was also challenging for GM to implement whatever little it learned from Toyota. GM understood that Toyota structured the factory floor and relations with suppliers differently. But shifting these new methods to GM's legacy plants in Detroit were complicated. The new Saturn line was built from the above learning, but old corporate habits were hard to change even by rebranding and rebuilding. General Motors was straddled with the ‘legacy costs’ of providing healthcare and pensions to a host of retired workers, which cost GM millions of dollars every single year. (11) “When GM agreed to them, the company was lauded as an example of good corporate governance. Now, everyone says, ‘How did they agree to this?’ Back then, it was considered enlightened. But now, it’s a different story,” said Jeremy Anwyl, CEO of Edmunds.com. (11) These legacy costs shake out to be about $2,000 per car, David Cole, Chairman of the Center for Automotive Research, told Popular Mechanics. And that $2,000 has to be passed along to the consumer if GM wants to turn a significant profit. (11) To better understand how UAW got the upper hand, we must go back into history, during the Great Depression as conditions eroded, creating a ripe environment for workers to unionize. In 1936, the tide turned. The United Auto Workers (UAW) was...
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