Wednesday, May 30, 2012

Essay on General Motors

Essay on General Motors

1. What is the author's main idea or ideas? 
In the past few years, GM has been struggling to make profits in this turbulent economy. Unfortunately, things got much worse for it last year with bankruptcy procedures, restructuring and the government bailout. (GM, 2009) In the 2005, Fortune Magazine article, Susan M. Kaufman asserts that GM is in a big bind right now and even though there are plenty of hurdles in the future, GM’s CEO Rick Wagoner seems like the man that can help GM overcome its setbacks.

2. What important facts (in the article) support the author's idea(s)? 
Wagoner has taken upon himself great tasks in order to reverse GM’s declining revenue. He pointed out many problems that need to be addressed in order to fix the struggling company. One of the major things that he needs to work on and something that the author mentioned more than once, was the need for renegotiating contracts with the United Autoworkers Union or UAW. The healthcare benefits the company was expected to pay out was approximately $5.6 Billion to current and retired employees and their families. (Ryan, 2005)
Wagoner was also interested in knowing how the compnay and it’s employees are doing from the inside, so he initiated 90 minute sessions with employees from within the company to get a better idea of what is going on. Of course a company cannot be successful without cars that will be a hit with the consumers, and he encourages some innovation when it comes to green tech cars, but is still a bit cautious.

3. Does the author's idea(s) agree with or disagree with the concepts and ideas set forth in the text?
For the most part, the authors are on the right track with respect to what the text describes.

4. Which of the author's ideas do you agree with? WHY?
The biggest thing they go into is the fact that health care is costing the company exuberant sums of money and that is an issue that needs to be dealt with. Granted, the healthcare industry in The States is out of control and the costs for employers are skyrocketing; nevertheless, GM should have done more to stay ahead of its competition like its former CEO fifty years ago who acted as though his competitors were breathing down his neck. (Ryan, 2005) The thing the authors mentioned, which I find interesting, is that Wagoner can just hope for demographics to do its job and let the older pensioners die-out so the company can save some money in health care.

5. Which of the author's ideas do you not agree with? WHY?
I do not agree with the fact that the author mentioned Wagoner’s skepticism of hybrid automobiles. I think that the Japanese have done a tremendous job marketing and manufacturing them, and sales have shown that it is a great investment for any automotive company. (III, 2006)

6. Does any of this article relate to your experiences? HOW?
With respect to innovation, in my experience, and studying different business cases, it has been shown that the companies that survive fierce competition are the ones who streamline themselves and innovate. By becoming the industry leaders in the product they sell, a company can leave its competitors in the dust, yet it still must look back at what they are doing in order to maintain their lead. Taking a company like Apple, for example, it has something like $11 Billion in Cash, no debt, and assets as well. It is an industry innovator, which streamlined itself very well and is very efficient with new products and ideas. Granted these are two different industries, but being on top for so long, maybe GM just closed its eyes to the innovative ideas of its competitors.

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