Archive for Bail-Out

Top Challenges Facing General Motors

Posted in Uncategorized with tags , , , , , , on December 2, 2008 by mjung18

Within the last 10 years General Motors has had to face a variety of issues which they have never encountered previously. The first and possibly most prevalent issue facing the American auto maker is the serious drop in sales which continues to plague the company today. This drastic drop has been blamed on a number of things but the 2 biggest causes have been the turbulent economy that is currently in place in the U.S., as well as all over the world.

The second commonly accepted cause of the major decline in GM sales is the simple fact that within recent years people have made a drastic shift to buying foreign made cars. Many consumers feel that the foreign made cars, such as Honda and Toyota, are more reliable, better looking and more worth the money that would have to be spent. Customers have also made the switch towards imports due to dramatically higher resale values as compared to those of American made cars.

Currently GM, Daimler-Chrysler and Ford, which make up the “Big 3” American auto makers, have announced talks trying to secure a multi-billion dollar financial “bail-out” from the federal government. This bailout is looking more and more like it will become a reality, but if for some reason it doesn’t formulate, GM, as well as the other American auto makers stand a very good chance of having to file for bankruptcy and possibly have to shut down operations in certain divisions if not as a whole.


GM has also been the focus of a large amount of negative publicity in the media due to the number of factories and assembly plants that the company is currently having to shut down, or make major down sizes in. This barrage of negative publicity is also linked back to the major economic turmoil surrounding the company and the U.S.

Photo Credit:
Photo applied from Google Images.

Information Citation:

Vlasic, B. (2008). Each Player in Big Three Is Devising Its Own Plan. New York Times


General Motors In A Time Of Crisis

Posted in Uncategorized with tags , , , , , on December 2, 2008 by mjung18

One of the biggest and most publicized crisis situations that General Motors has had to face since its creation 100 years ago is actually currently taking place. GM’s current financial crisis has been plastered across news headlines all over the world and especially here in the U.S. A drastic decline in sales, extensive layoffs and a poor economic environment are all contributing to this issue.

General Motors is by no means the only American auto maker currently having to deal with this crisis; Ford and Daimler-Chrysler, which are the other 2 companies that make up the “Big 3” American auto makers, are also trying to overcome extreme financial turmoil.

Many things are being done to try to turn the company’s finances around. Some of these methods are shown in a positive light, while many others are having more negative effects. Currently GM and the rest of the “Big 3” are appealing to congress for a multi-billion dollar “bail-out” plan. This bailout is very similar to the one that the nation’s financial sector just received. The intent of this bailout is to keep these auto makers from going under completely. While many Americans view these federal bailouts as necessary in our nation’s struggling economy, many are upset at the idea of having to put the country farther and farther into debt so save these companies.

General Motors has also received a large amount of negative publicity for another crisis aversion technique; layoffs. GM has been forced to layoff thousands of employees and even close factories due to the dramatic decline in sales among the domestic car market. Though these layoffs are enabling the company to save money by not having to pay nearly as many employees, the negative publicity that the company is receiving is overwhelming. Unemployment officials have even hinted at these layoffs, by GM and other auto makers, have had a great effect on the growing number of Americans that are currently unemployed.

General Motors is trying to pull themselves out of the gutter in some more positive ways as well though. For almost a year now, General Motors has been offering “GM Employee Pricing” among other special pricing deals on nearly every make and model in the GM lineup. This pricing campaign is aimed at getting more people to purchase GM vehicles by offering dramatic discounts on mostly every car they offer. This campaign not only proves to be beneficial to GM, but additionally to the nation’s economy as a whole.


General Motors is also relying heavily on the introduction of a new Chevrolet car which GM hopes will attract buyers. The Chevrolet Volt is the car that GM is placing a heavy burden on. The Volt is the world’s first totally electric car, emitting no emissions and requiring only electricity as fuel. GM and Volt developers are hoping that the sheer originality and innovative nature will arouse customer interest and make customers flock to dealerships for their chance to purchase this groundbreaking car. The only concern coming from GM officials, automotive enthusiasts and economic researchers is the estimated $40,000+ price tag the GM is anticipating for the Volt.


Photo Credit:
Photos applied from Google Images

Information Citation:

Vlasic, B. (2008). Each Player in Big Three Is Devising Its Own Plan. New York Times