General Motors (also known as GM), is the world’s second largest car manufacturer based on annual sales. GM was founded on September 16, 1908, in Flint, Michigan, as a holding company for Buick, operated by William C. Durant. Later during that year, they established Oldsmobile. The following year, Durant brought Cadillac, Elmore, Oakland and several others. In 1910, William Durant lost control of GM to a bankers’ trust, because of the large amount of debt taken in the previous year. Years later, Durant started Chevrolet Motor Car Company and through this he secretly purchased a controlling interest in GM. Once ownership was reclaimed by Durant, ...view middle of the document...
That year, their total revenue was $179.984 million. General Motors stated, “We believe that the continuing downturn in the global automotive industry is likely to cause significant changes in ownership and consolidation among vehicle manufacturers and other industry participants. We are currently considering a wide range of shared interest and comprehensive restructuring opportunities on a national and global basis, such as possible transactions with other vehicle manufacturers, including finding an outside investor in Adam Opel GmbH (one of our existing German subsidiaries). Any strategic initiatives, domestic or foreign, if consummated, could be material to us.” (Yahoo Finance, 2009)
In March 2009, GM reached an agreement with the Canadian Auto Workers Union (CAW), which that expect will reduce the legacy costs associated with their Canadian operations. This agreement will reduce cost in the near future.
General Motors has a detail plan to return to a sustainable profitability in 24 months. They plan to demonstrate GM’s viability under conservative economic assumptions and expand and lowers the company’s breakeven to a U.S. market of 11.5-12.0 million units annually.
Stock Price Analysis
For the past three years, the stock price dropped from as high as $31.22 on October 12, 2007 to its current price of $.59. On March 19, 2009 the UST announced that it will provide up to $5.0 billion in financial assistance. After months of speculation and recovery attempts, General Motors has finally reached a much anticipated ending. General Motors filed for bankruptcy June 2009 by submitting its reorganization papers to a federal clerk in Lower Manhattan. The last two years have been extremely hard for the auto industry. As the housing market spun out of control, people had no choice but to reevaluate their spending habits. Even the government's intervention and billions in bailout funds just could not pull GM out of the downturn that they were experiencing.
On October 5, the General Motors Corporation planed to combine its domestic and international automotive operations. The combined automotive operations were lead by G. Richard Wagoner Jr., who is the North American operations president who is expected to become GM’s chief operating officer. Louis R. Hughes, GM’s president of international operations, moved his base of operations back to Detroit from Zurich after months of disputes with GM’s European executives. But G.M.'s domestic and foreign design engineers have been collaborating for years on a new sedan design that would be manufactured worldwide. A consolidation of management responsibility at the top would partly reflect this new effort.
General Motors restructuring plan is broad based, with total global employment expected to be reduced by over 27,000 employee over the course of the coming year, 26,000 of which will come from outside the U.S. GM’s local subsidiary (Holden) and the Australia government have...