Poletown Dilemma
The Poletown Dilemma
Contents Introduction 1 Who are the stakeholders involved in the new site selection decision? 1 What are the factors that you would consider to choose the new site? 2 What is your recommendation to General Motors regarding the site choice? Why? 4 How would you implement your recommendations? 4 Exhibit 1 Comparison of costs of setting up plants in Detroit and Mid-West 5 Exhibit 2 Linkages with the society across the value chain 5
Exhibit 3 – Categorization of Social Issues faced by GM 6
Introduction
General Motors is faced with a dilemma. In the face of economic depression, competition from foreign players was driving down profits and the market’s preference was changing to efficient cars due to increase in gasoline prices. The situation is demanding dire steps like increasing capital investments to 4 times the usual amount to modify existing plants and to build a new one that adopts new technology that enables GM to change their product line drastically.
GM has to close two existing non-performing plants and build a new one. The choice is between a plant in Detroit itself in a new area and one in a Mid-Western state. Time is of the essence as GM has to make a choice such that it can stay competitive.
Who are the stakeholders involved in the new site selection decision?
The main stakeholders in this and their considerations are summarized below:
General Motors Chairperson Thomas A Murphy – onus on him to take GM out of its current crisis.
Midwest State heads – With the economy not doing well throughout the country, they would want the plant to be setup in Mid-West and provide employment opportunities to its people.
Stakeholder | Goal | Negotiation Power | comments | Mayor | Economic development,
Enhancing public-private coalitions, upliftment of the African American community | Medium | GM is headquartered in Detroit, so keeping good relationship with the government is important for GM
Mayor is
Contents Introduction 1 Who are the stakeholders involved in the new site selection decision? 1 What are the factors that you would consider to choose the new site? 2 What is your recommendation to General Motors regarding the site choice? Why? 4 How would you implement your recommendations? 4 Exhibit 1 Comparison of costs of setting up plants in Detroit and Mid-West 5 Exhibit 2 Linkages with the society across the value chain 5
Exhibit 3 – Categorization of Social Issues faced by GM 6
Introduction
General Motors is faced with a dilemma. In the face of economic depression, competition from foreign players was driving down profits and the market’s preference was changing to efficient cars due to increase in gasoline prices. The situation is demanding dire steps like increasing capital investments to 4 times the usual amount to modify existing plants and to build a new one that adopts new technology that enables GM to change their product line drastically.
GM has to close two existing non-performing plants and build a new one. The choice is between a plant in Detroit itself in a new area and one in a Mid-Western state. Time is of the essence as GM has to make a choice such that it can stay competitive.
Who are the stakeholders involved in the new site selection decision?
The main stakeholders in this and their considerations are summarized below:
General Motors Chairperson Thomas A Murphy – onus on him to take GM out of its current crisis.
Midwest State heads – With the economy not doing well throughout the country, they would want the plant to be setup in Mid-West and provide employment opportunities to its people.
Stakeholder | Goal | Negotiation Power | comments | Mayor | Economic development,
Enhancing public-private coalitions, upliftment of the African American community | Medium | GM is headquartered in Detroit, so keeping good relationship with the government is important for GM
Mayor is