General Motors – An Overview
General Motors is an American multinational corporation headquartered in Detroit, Michigan. GM produces cars, crossovers, trucks, SUVs, minivans, pickups, luxury vehicles, commercial vans, buses, military vehicles, construction equipment, motorcycles and racing vehicles under its nameplate and also sells related parts and services worldwide.
In 2016, GM had revenues of $181 billion and employed approximately 426,000 workers globally. Since World War II, GM has been among the world’s largest car manufacturers. Still, during most of the 20th century, due to increased competition from Japanese automakers such as Toyota Motor Corporation, Honda Motor Company, Nissan Motor Company, and Mazda Motor Company, and fierce price wars, GM was often unable to compete effectively against them. However, in the late 1990s, GM began restructuring itself to compete more with these competitors. In 2007, GM became the largest automaker in the United States for the first time since 1937, when it overtook Ford; however, GM lost its position after a 2009 bankruptcy reorganisation.
After years of slow growth (in terms of both product quality and cost) and heavy losses, which led to the 2008 financial crisis, GM now faces challenges similar to those faced by other U.S. automobile companies, including Chrysler Group LLC and Fiat Automobiles S.p.A. General Motors has also faced difficulties caused by the shift of consumers to low-priced models built by Chinese manufacturers. As a result, GM has reduced production capacity and shifted focus toward higher profit volume markets in Asia, Latin America, Africa, and the Middle East. These changes have resulted in annual losses since 2010, and in 2014, GM filed for Chapter 11 bankruptcy protection in the U.S., Canada, Puerto Rico, and the UK. This followed another Chapter 11 filing in 2009. After emerging from bankruptcy in 2017, the company underwent a significant transformation and adopted a business model focused on autonomous driving, electrification, ride-sharing, mobility services, and shared mobility. Today, GM is considered a “laggard” compared to the industry leaders and has fallen behind in the development of electric vehicle technology.
The company introduced the Chevrolet Volt plug-in hybrid concept car in 2005. Since then, the company has produced various battery-powered vehicles, such as the Chevrolet Bolt EV and Cadillac ELR and hydrogen fuel cell vehicles, such as the Chevrolet Mirai and the Cadillac CTS Coupe Hydrogen Fuel Cell. Other products include the Buick Veliteq, Opel Corsa e-Hybrid, and Saab 9–3 ePower.
As of August 2018, GM’s global headquarters are downtown Detroit, Michigan. Its operations, and its European subsidiary (Opel), are primarily based in Rüsselsheim am Main near Frankfurt am Main, Germany. In addition, GM operates plants in 30 countries around the world. GM’s joint ventures are headquartered in Beijing, Shanghai, Guangzhou, Chongqing, Wuhan, Tianjin, Chengdu and Zhengzhou.
The history behind General Motors
When we look back at GM, its story begins during the Great Depression when Henry Ford became frustrated with his workers’ wages and decided to make them even worse. He called for an assembly line to speed production up and reduce costs, which led to mass unemployment among skilled factory employees. This had disastrous effects on these highly educated men that could not find jobs in other industries. To help alleviate the problem, he offered them $5 per day to do odd jobs around the plant. One worker wrote in his memoirs that the pay was “a living hell”.
After this incident, Ford began to focus on selling cars instead of making them. By 1939, Ford Motor Company dominated the auto industry, producing more cars than any company in America. But at the same time, Ford employed thousands of unskilled American labourers. As a result, the United States government fined Ford for violating fair wage laws, and it took years for Ford Motors to recover financially. In 1941, President Roosevelt signed the Fair Labor Standards Act (FLSA), requiring employers to pay workers at least 40 hours per week, 8 hours of overtime pay, and provide safety equipment to both the employer and employee.
To compete with other car manufacturers, Ford developed the Edsel, a car that cost twice as much as competitors and was built without customer input. After Edsel failed miserably, Ford created its design team (known today as the Lincoln Design Group) to develop better products. The group was headed by designer Harley Earl, known for creating iconic vehicles such as the Thunderbird and the Mustang. The Edsel and the Fireball were two examples of cars designed under Harley’s leadership.
Harley eventually left the company after a dispute with Ford CEO Alfred Sloan. His replacement, Lee Iacocca, prioritised improving quality control at Ford. In 1961, Ford introduced the Mustang, a sports coupe that was priced competitively with similar models from Chevrolet and Plymouth. Sales surpassed expectations, and the success led Ford to create a new company division to handle overseas operations. In 1962, Ford opened the world’s largest manufacturing facility in Mexico City, where the company produced inexpensive cars for customers in emerging markets.
Lee Iacocca later served as Chrysler Corporation’s CEO, bringing many innovations to the company, including improved marketing techniques and cost-cutting measures. Under Iacocca’s tenure, Chrysler became profitable, and in 1983, he led the company to become the number one automobile manufacturer in North America.