Showing posts with label GM. Show all posts
Showing posts with label GM. Show all posts

Wednesday, December 12, 2012

GENERAL MOTOR CO.: FAILURE

...and the shareholders get their pants walloped!

Swing & Miss #3: GM’s premature focus on hybrids cost the company too much. Despite being in the news for over 15 years now, hybrids only contribute to about 2.15% of all vehicle sales! Then there are reports which prove how by 2020, oil production will cross a smashing 1,600 million barrels annually – 6667% more than what was produced in 2003! In other words, hybrids are not required in the near future year, but Wagoner still believes it, for he has to swing!

Swing & Miss #4: Wagoner’s confused branding strategies have ensured that high-end sports cars (like the Corvette Z01) & small cars (like the Spark) are sold under the same tag, Chevrolet? Apparently, he skipped branding management lectures too! Swing & Miss #5: During his tenure, this “easy-going” CEO destroyed a blood-freezing 98% of GM’s Mcap, shaving-off of a clean $90 billion of shareholder wealth. And just before he was booted-out by the Obama administration last month, he had the most wonderful gift for all at GM – a record $52.8 billion in losses for FY2008!

Well, today, Wagoner’s out, but GM has to live on. But will it? “A lot of things depend on the survival plan that GM will present but filing for bankruptcy makes sense as of now,” claims Christian Breitsprecher, Industry expert, Sal Oppenheim. Well, June 1 is not far away. Fingers crossed...


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

For More IIPM Info, Visit below mentioned IIPM articles.

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Monday, December 03, 2012

...And 5 REASONS WHY GM INDIA WOULD THRIVE!

“Nothing’s gonna change my love for you...” says GM to India! They seem to be getting along quite fine. And it seems, quite ironically, that while GM missed out on the key basics in its home market, it seems to have gone by the book and achieved quite considerable success in India. It has been said that the child is the father of the man. Irrespective of whether the parent ever regains, or even hopes to regain its former glory, amidst all the muddle it has gotten itself into, GM in India has smartly got itself into a position where it can catapult itself into the next league and in fact use India as a hub to expand its ambitions into other emerging markets. We proceed to explain the five basic reasons why we firmly believe that GM India is definitely slated for a bright future.

reason #1: getting taller and fatter by the day! Interestingly, staying away from the gloomy picture back home, GM’s India division believes that its fate does not rely on the approval or denial of the bailout package by the White House, as P. Balendran, Vice President, General Motors India, asserts, “All our product programmes are met by internal accruals and ours is a debt free company. The chaos in the US will not hit the India division of the company.” And the sheer optimism of Balendran seems to be backed by a lot of figures.

Some time back, the company was not looking very promising with its India operations. Its American lineage was placing it at a considerable disadvantage with Indians perceiving its cars as fuel guzzlers. People were writing the company off based on its sales performance with respect to Japanese brands, particularly Honda and Toyota, which had a perception of being best in class, thanks to the Japanese image. At that time, B&E had carried a feature on the company (in 2005) and said that the small cars would help the company gain a strong footing in the market. Sure enough, mainly after the launch of the compact Spark and Aveo’s variant U-VA, the company gained momentum in the year 2007 and then there was no looking back.

The company has used the premium brand image of the Chevrolet brand and extended it quite effectively in the small car category, as the brand communicates a ‘best in its class positioning’. After the company registered a figure of 60,000 units in the year 2007, moving ahead at a growth rate of 63% as compared to 2006, GM India has already attained a sales figure of 65,000 units till the month of November, 2008 (SIAM). “We expect to sell close to 75,000 to 78,000 units this year, registering a growth of about 20% in 2008,” asserts Balendran. Well, at a time when the overall auto industry is growing at a meagre rate of 2-5%, GM India is pacing past all others with a 20% growth rate and this is surely raising many eyebrows towards GM in the sector.


Source : IIPM Editorial, 2012.An Initiative of IIPM, Malay Chaudhuri

For More IIPM Info, Visit below mentioned IIPM articles.

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Wednesday, October 17, 2012

RICK WAGONER: EXIT

32 long years did this Harvard MBA take to understand GM; one fine day it took the US Senate to fire him! No more gambles, Rick...

Oh yes, read your bio too – was interesting! Born: February 9, 1953, in Delaware, to George Sr. & Martha. Post-MBA, you chose GM over other lucrative jobs. Commendable! Your big break came in 1992, when the-then CEO Smith appointed you as the CFO. Your low-key lifestyle and the fact that you command a high popularity quotient amongst your employees, makes you most respected as a friend; but as a leader, there are complaints that you lacked that “ruthless streak needed to make the tough decisions required to bring GM back from the brink of bankruptcy.”

But Rick, we still stand by your ox-like faith in hybrids; an engine type which despite having existed commercially for 15 long years, accounts for a pathetic 2.15% of world automotive sales! Now 2.15% does not define majority, does it? But it’s ok Rick; poor mathematics is not a turn-off for us. But it sure did get your pants on fire, and we couldn''t do anything about it. [Sorry about that; for oil supply may be increasing, but water is really scarce in our parts of the world.]

Next, come to geography. Rick seriously, what were your grades in school? CEOs of manufacturing entities realised years back that shifting operations to emerging economies can help cut costs tremendously. You did too, but like the kid who skips homework, you jumped out of the window of sanity, and trashed your vision into the nearest garbage tank… and enjoyed playing football on American grounds. Oh yes, GM is an American legacy brand; how can GM cars be produced in emerging third-world, Hydrogen sulphide emitting lands? Well, thanks to your ‘Be American, buy American’ ideology, every GM vehicle produced in the past two years has cost GM $4,500 in just welfare cost. Rick, you rock! Your drained out industrial relation skills & super-confused branding philosophy have also put GM in a fix. Today, the cost of pension & healthcare per GM man-hour is a high $24 – a blood-freezing 100% more than at Toyota, Honda & Nissan! Now beat that!

Though the Obama administration finds you abortive, we still stand by you; for you taught us the harm that ‘addiction to legacy’ can do, and how to walk away with $26 billion of exit benefits after blowing your company to smithereens! But Rick, before we leave, here''s an information that you could use to justify the ''cold turkey'' stance that Democrats used to oust you – as per Federal records, GM contributed $1.7 million to the Republican pocket since you took over as CEO – 108.6% higher than what it gave the Democrats. Some revenge there, eh Rick? You are a veteran at GM – 32 long years and today, you''re married to Kathy & have three sons – Matthew, Scott & George. God bless you, Rick, for standing by your first wife & employer to this day. They never understood your sacrifices, did they (the US Senate, we mean)?


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
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