This paper explores the change that General Motors faced after the economic recession and credit crisis that began in 2007. This pushed GM to request assistance from the U.S. Treasury which resulted in the restructuring of their US operations. The start of this restructuring change involved downsizing GM’s operations in the US. Along with the mandate imposed from the US government GM engaged in downsizing to reduce costs, and to cope with the external pressures. The pressures that propelled GM to change included market decline pressure, fashion pressures, and mandated pressures. In its restructuring, GM closed plants, cut its workforce, shed three brands, reduced debt, introduced popular new vehicles, and implemented changes to reduce retiree legacy costs, which had been a major financial drain (Canis & Webel, 2013). Although this downsize had a lot of negative results, including employee morale and retention, the overall effects of this change on GM’s operations were positive as their share price and finances grew since they filed for bankruptcy. Therefore, the change that GM executed was done effectively and helped the company keep their company standing.
Given the speed and depth of the economic crisis that began in 2007 many companies engaged in downsizing as a way to cut costs and adapt to changing market demands. Many automotive companies experienced significant declines in sales and revenue due to the precipitous drops in demand for automobiles and the growing switch to smaller, more fuel efficient, vehicles. The recession and global credit crisis not only affected smaller auto retailers but also the larger ‘big three’ auto manufacturers Ford, General
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