For many years General Motors Corporation was very clear tha

For many years. General Motors Corporation was very clear that their goal was to be the largest car company in the world In fact the company reached that goal and maintained that place in the industry for many years Strategies included having a large number of different models, international subsidiaries, a self contained financing arm. and interests in other related businesses such as (tala companies, etc Vet in 2009. the company was forced into bankruptcy and would have disappeared had the L- ted States government not provided billons of dollars m emergency financing to allow the company to Reorganize and continue operations albert as a company with fewer models and less non-manufacturing interests What economic concepts other than the decline in demand for new cars in 2009 could explain the economic decline of this huge corporate Be sure to address issues of firm goals, economies of scale. fixed costs, etc. P S General Motors has reorganized and once again sells more cars than any company in the world though Toyota has exceeded their sales at times over the last three years

Solution

The biggest mistake as Wagner said was killing the EV1, the company’s pint-sized electric car that was in the test fleets in the late 1990s. For years the ongoing joke was that GM was a bank that happened to make cars. The major mistake, GM allowed the Union Auto Workers to ramp up cost ad infinitum at a time when there were no foreign automakers’ factories on the U.S. soil. On arrival of foreign-owned manufacturers in less-unionized states, the U.S. giant automaker’s health and pension costs were greatly affected. GM was operating an impossible cost disadvantage against its competitors.

GM was badly affect by the CAFÉ standard mandating average fuel economy which enormously benefited Japanese and other makers in the small cars segment. The company’s product range was far more causes for its decline than any shortcomings. The fierce fighting between five GM divisions over pricing and market share tends to drive GMs prices down which has a devastating effect on car unit margins. Moreover, the complex and fragmented manufacturing drive up the unit variable costs of producing each car and dramatically reduce unit margins.

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