Impact of Financial Losses for GM Auto Manufacturers Essay

Impact of Financial Losses for GM Auto Manufacturers - Essay ExampleBy mid-century, the automobile was a necessity in every(prenominal) U. S. household, and GM led the way with Ford and Chrysler close behind. The Big Three controlled the industry from Detroit, Michigan. According to Wikipedia, the period from 1960-1985 was perhaps the greatest in GMs history, as it eventually held slightly over 50% of the U.S. Market (General Motors, 2006, 2.3). At the time, it was all about status, having the most popular brand. Unfortunately, in the mid 1990s, a downward spiral began, which has all the same to be resolved for American car makers. It could have been predicted in 1984 when a joint venture between GM and Toyota gave Toyota an opportunity to establish a launch in the United States and avoid impertinently established tariff on foreign pick-up trucks. Toyotas growth has accelerated ever since, with a $4.1 billion dollar pee in 2005 compared with GMs $10.6 billion dollar loss ( Solm an, 2006). In a recent PBS interview, GM CEO Rich Wagoner noted that restructuring is taking model in the company in an effort to compete in the global auto industry and global economy (Solman, 2006, par. 12). He claims that the company is launching new products, and accelerating the application of biofuels E85. Wagoner also mentions a breakthrough health care deal with United Auto Workers (UAW) and the major restructuring of GMAC. With attrition and plant closings, he is approbatory that the company will be more streamlined and better able to compete globally. What sounds like positive action, however, definitely has its down side, with employees about to be face with increased co-pay for health care and pharmacy and heavy job losses as plants close down. The companys failure to foresee drop in demand for gas-guzzling SUVs, check entry into hybrid market and Toyotas reputation for high quality puts them behind in the race for market share (Kellar, 2006, par. 2).Micheline Mayna rd, Detroit bureau chief for The New York Times, claims in her book, The End of Detroit (2003) that by focusing on high-profit light trucks, American automakers, including General Motors, turned its back on people wanting to own cars rather than trucks and loose the door to Toyota, Honda and Hyundai. Consumers retaliated by turning their backs on trucks and purchasing foreign-brand cars. General Motors obviously does not look beyond present trends to what the future might bring. Krolickis Reuters article (2006) is all one of several news stories (Wall Street Journal, Bloomberg, CNW) reporting the bankruptcy of Delphi, one of GMs most important suppliers, which, along with GMAC filing errors, brought about even more losses in 2005 than had been previously noted. In keeping with General Motors short-term goals to increase market share, Associated Press writer Dee-Ann Durbin recently announced the companys gas-price