2009 Was A Difficult Period For General Motors
In an ultimate culmination of poorly designed vehicles such as EV1 and several recent
vehicles with the Pontiac badge, General Motors, the American automotive giant, was compelled to do what many had previously considered unimaginable. However, by June of 2009 filing bankruptcy was now considered unavoidable. Unfortunately, GMC has apparently used a faulty paradigm throughout their company: the idea that bigger is always better. But the winding road up the hill of automotive competition, proved too much for the sluggish and lumbering company. Their 'vehicle of change,' apparently built on that same slogan, was outmaneuvered by their more nimble competition. As their vehicles consumed gallon upon gallon of gasoline with little mileage to show for it, their company continued to consume massive amounts of financial resources while making little progress. Importance was not given to efficiency and quality in their vehicle models or their business model.
The most popular models such as the Chevrolet Silverado and the Chevrolet Impala were experiencing declines and could not outpace the losses generated from poorly selling models such as the GMC Envoy and Hummer's H3 and H2. In the end GM has become a shell of its former self, and survived only due to the incredible bail out by the American taxpayer of more than $50 billion. Massive cutbacks have left it with an hourly workforce of about one tenth of what is was at its height in the late 70's; only 54,000 of the workforce remains of the 511,000 workers once employed for the company. At the same time GM's market share in the US plummeted from almost 44% to about 19%. It stock price, once considered a blue chip stock, left any remaining investors will only get $0.75 per stock, after losing over $80 per stock in 2008 alone. Revenues at the end of 2008 showed that GM had only made about $150 million and down 18.3% from 2007, but due to their extremely high operating, they still posted a loss of just over $30 million. In fact, in ten years, from 1999 to 2009, GM sales in the US dropped from 5,017,150 to 2,084,492; that is a reduction of more than 50%. GM has proven that truly the bigger they are, the harder they fall.
by: RW Tanner
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2009 Was A Difficult Period For General Motors Anaheim