Is General Motors Back on Track?

Is General Motors Back On Track?

Since the first organization was developed years ago, in the present there are those who try to change an organization and miss the mark and those who succeed. Such an organization is General Motors (GM). We will analyze how GM has changed its operations with respect to trends, issues, and problems that were driving the changes. We will determine the changes that GM has implemented and needs to implement to remain competitive within the industry. We will describe GM using one of the change models as defined in the course reading. We will also assess the effectiveness of the changes as we understand them.

There are those who believe, myself included, the Obama Administration should have not bailed out GM because most of the company's problems are due to self-infliction by failing to adapt to changing tastes and behaviors, also the shrinking of quality gaps, increased labor costs, lack of innovation, and the management of funds by their subsidiaries. In studying GM, we realized that the major reason the company declined was due to the company's self-inflicted problems. Their business model focused on the production of Suburban Utility Vehicle's, which is no longer profitable because of the rise in gas prices in and the fact that their competition is making smaller and more fuel efficient cars. However, the trends which were at the heart of the required change for GM were the slowing economy and the public which meant slow car sales and carrying too much debt. One of the main culprits behind the tragedy of GM is the failure of the largest American auto-mobile manufacturer to adapt to the changing tastes and behaviors of the consumers in the market.

Labor cost is also one of the reasons for GM's accelerating decline. GM has been providing life time benefits to its numerous retirees while its sales and revenue have plummeted. Anonymous states, "Reflecting a dramatic deterioration in economic and market conditions during 2008, new vehicle sales declined rapidly, falling to their lowest per-capita levels in 50 years" (Anonymous, 2009, p. 5). This deterioration in economic climate and market caused the largest automaker to file bankruptcy and restructure. In addition, this change affected shareholders, retired workers, and dealers in a way which was not pleasing to them. Kennedy indicates, "GM shareholders were wiped out as the company was delisted from the New York Stock Exchange; 500,000 retired auto workers will see their benefits cut and 2,600 dealerships employing another 100,000 people will be cut loose and may close" (Kennedy, 2009, p. 1). This required GM to think of a new way to perform their business, reduce debt, and produce new technology to change trends.

GM's structural and financial problems were magnified in 2008 when gas prices skyrocketed and thousands of American consumers were not