The sustainability of General Motors is now in the restructuring stage of the project presented at the end of last year in the U.S. Congress. Due to the difficulties encountered by General Motors during the recent economic and financial crisis, the latter faced constraints for thirty-nine days under the control of the state, from June 1, 2009.
It can be seen that the use of Chapter 11 of U.S. bankruptcy law has been beneficial to the consolidation of accounts of the international group, and also reflected its new strategy. Thus, the actions envisaged by General Motors to improve its structure and its management, find a reasonable size, streamlined industrial processes and business methods and helped it focus on the essentials.
Presented in detail are the various strategic and corrective measures that General Motors intends to implement with the aim to assess their relevance. This is necessary when compared to the vital need for effective coordination of the legendary group's restructuring plan, but also to establish a portfolio of brands and viable source of growth.
We are witnessing at the end of last year to a rapid transformation of the organization of General Motors Corporation, starting with the highest level of the hierarchy. On 1 December 2009, the Chairman of the Board, Ed Whitacre justified the need to dismiss the then Director General Fritz Henderson. This sudden decision reinforced the general opinion on the true will of General Motors to renew and modernize itself.
The new governance should break with previous policy giving renewed vitality with greater ease in questioning the whole enterprise. It seems that the strategy of its competitors has been an inspiration for GM since the operation was paid for the by the Italian group Fiat. The Fiat group is now managed by Sergio Marchionne and Ford with the arrival of Alan Mulally as its head.
The first statements of the interim boss, Ed Whitacre, also seem to illustrate the absolute need to reassess the objectives of the group. According to a senior analyst the CEO has set a challenge to cut costs faster than has been ever anticipated. Utopia does not mean what characterizes it as the latter had shown himself more conservative than his predecessor on the stock market re-entry period.
In a second step, the restructuring program thus extends to subsidiaries overseas focusing particularly on the Europe segment in which the Opel brand is the spearhead of GM. While GM Europe headquarters was located in Zurich, Switzerland after the restructuring plans it will be relocated to Germany for strategic reasons.
The restructuring of GM's European subsidiary was then established in January and this will include the closing of a production site in Belgium (Antwerp). As the plant was initially installed at the headquarters in Zurich, it will not shut down completely but will be used solely for the Chevrolet brand which it must manage the administration. This appears to be a positive sign with the coordination to specialize on a single brand.
Tags: GM restructuring process, Europe branch, manufacturing plans
[...] In January 2010, sales of the brand dropped by 40% compared to the pre-bankruptcy situation. Moreover, it contributed only up to in total sales of General Motors in this period. Because it is placed at the same level of worldwide sales for Porsche in the U.S. market alone and the tendency to buy efficient cars or hybrids continues (to the delight of Japanese and Korean firms), GM seems to have taken right decision. Moreover, no other group except the Chinese Tengzhong has showed an interest in buying Hummer which will definitively disappear from the global automotive landscape in February. [...]
[...] We now see that this use of Chapter 11 of U.S. bankruptcy law has been beneficial to the fiscal consolidation of the international group, and also reflected its new strategy. Thus, the actions envisaged by General Motors are designed to improve its structure and control, find a reasonable size, streamline manufacturing processes and business methods, and focus on the essentials. As noted by the CEO of the Group at the time, Fritz Henderson, the GM, must focus on growing its revenue now that the stock is back to being healthy. [...]
[...] Saturn and Saab: a decision which was compromising the future Thus, among the strategic choices of the restructuring plan which raises the questions, we recall the judgment of the Saturn brand. In the announcement, General Motors has formalized its previous bias. Indeed, when it was created by GM in order to replace the innovative offerings of Asian manufacturers in the U.S. market in the 1980s, the group never achieved this goal despite the economy remaining favorable to this market segment. [...]
[...] It was even considering a return to profitability by 2012. However, the leaders of General Motors have not been able to exploit and develop this brand. In addition, Saab has assets which inflate the share price of Spyker by from the first day of acquisition, an additional indicator, which confirms the interest of the brand. E. The industrial and commercial consequences At another level, the restructuring plan of General Motors has reassessed the importance of partnerships in terms of refocusing. [...]
[...] Consequently, General Motors even began to doubt his own decisions, and ultimately, in a burst of lucidity, saved the German Opel group despite having long established conditions of assignment with the Canadian supplier Magna. It is true that Opel seems like the obvious choice for a coherent strategic positioning of its product lines and geographic market. But does this mean that other brands controlled by GM did not have the means to participate in the future growth of the group? To answer this, we must understand each brand individually, but we must initially divide the focusing process involved. [...]
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