...Case Analysis: General Motors Strategic Issues and Problems General Motors (GM) is the largest industrial corporation among the U.S. automakers. Because of the trends of tighter government regulations and competition from foreign automakers, the company has been challenged of being competitive. In order to improve the current situation, the company is seeking a strategy to develop for next few years. Analysis and Evaluation Currently, GM has two existing Detroit manufacturing facilities that need to be demolished and replaced by one state of new plant. The new plant would require being close to suppliers and about 500 acres to allow for a new robotics system within the budget of $500 million. Because closing the two existing plants would lose more than 7,000 jobs in local area, Detroit Mayor Coleman Young wants GM to remain and build new plant in the greater Detroit area. Poletown is the only one site that meets both GM and Detroit Mayor’s requirements. However, besides the cost of new plant, GM would have to pay an additional cost of $207 million as compensation to the local residents and as preparation expense. On the other hand, the Sunbelt sates, where have potential cheap labor for GM to reduce operation cost, has offered large tax incentives to GM. Therefore, it would be more profitable for GM to build the new plant in the Midwestern states within the Sunbelt. Alternatives GM has two main alternatives to improve its current situation. First, GM could remain...
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...Corporate Finance FIN-325 I. General Overview General Motors, also known as (GM), is an American multinational corporation headquartered in Detroit, Michigan. General Motors was founded on September 16th, 1908 in Flint Michigan by William C. Durant as a holding company, or a wholly owned subsidiary for Buick. The company designs, manufactures, and distributes vehicles on all six major continents under 18 brand names. Some of their well-known brand names include Chevrolet, Buick, Cadillac, GMC, Opel, Vauxhall, Wuling, Baojun, and JieFang. GM also operated the brand names of Saturn, Pontiac, and Hummer until 2009. During this time, GM was emerging from chapter 11 bankruptcy as a result of the 2008 financial crisis, and decided to shed those brands for strategic reasons in order to compete with foreign emerging vehicle distributers in the market. In January 1912, the company decided to incorporate themselves under the GM brand name, and were the gold standard in the automobile industry for almost 80 years. From 1931-2007, GM successfully led global sales amongst every car manufacturer in the auto-manufacturing industry. Currently, the automobile industry is one of the most fierce industries in the market. Not only is GM competing with American car manufacturers such as Ford and Dodge, but also foreign companies such as Toyota, Honda, and Hyundai. II. Financial Statements (attached excel sheet) Anthony Brooks For: Professor Goncalves Corporate Finance FIN-325 Final...
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...IRAC Method of Case Study Analysis Nsima Etok and Christopher Dunbar Business Law 531 March 31 2015 Gregory Martins Introduction In any type of business, whether it is partnership, Limited Liability Company (LLC) and or a Corporation, these are seen as different types of businesses that involves one, two or more People. The same is implied to businesses that are operated internationally between different Companies and Organizations across the globe which deals with either importing or exporting of products or other items of trade. It is therefore necessary that in this type of business, all the parties involved have to look into so many factors as will be analyzed in this paper from demographic, security, culture and values and other related issues which are more relevant to the smooth operation of the business and not forgetting the legal consequences from the business which is very paramount. Abstract With the increasing focus on globalization form(s) and companies operating their network of business activities across the globe, There are issues to be considered while dealing with those things that helps in streamlining how any business can operate effectively. Some of these are: Economy, Environment, Ethics, Social. It is obvious that when engaging in international business, the different parties must look into the merits and de-merits of their business operation and the overall impact on the business. (Thinkingbookwom...
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...General Motors Sample Case Study Next Generation C hevrolet Instructions You have 1 hour and 30 minutes to complete the case below, which involves building an Excel model and preparing a written memo. You will walk through your analysis as part of the interview process. The GM team will ensure your case material makes its way to the proper interview room. By the end of the allotted time, you should: Write a memo in Word no longer than one page outlining your analysis of the case problem and your recommendation Be prepared to walk your interviewers through your Excel model and present your recommendation (you can use either the Excel or the Word document as back up for your discussion; no need to prepare a Powerpoint presentation).The discussion of the case with Q &A will take approxi mately 30 minutes. Type your name in top left corner of both the E xcel and Word document Save the E xcel and Word document on your desktop with the following name: C ase Background It is January 2010 and General Motors is considering the development of the next generation full-size family sedan. ,a Full-size sedans are a mainstay in the American market. According to the US government classification, a fullAdoption of the term necessitated by an increasingly larger variability of car sizes and body styles. Full-size sedan segment size fluctuated significantly over the last 50 years. sales negatively, and so did the introduction of many other family, such...
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...Raju Sharma COMPARING AND ANALYZING FINANCIAL STATEMENTS TO MAKE AN INVESTMENT DECISION Case Study of Automotive Industry Business Economics and Tourism 2012 1 VAASAN AMMATTIKORKEAKOULU UNIVERSITY OF APPLIED SCIENCES Bachelor of Business Administration ABSTRACT Author Title Raju Sharma Comparing and Analyzing Financial Statements to Make an Investment Decision: Case Study of Automotive Industry. Year 2012 Language English Pages 72 + 5 Appendices Name of Supervisor Jukka Paldanius The purpose of the thesis was to evaluate and compare the financial statements of different companies to rate their performances. The emphasis was to be able to choose among several companies the best one to invest in. The aim of the study was met by comparing the risk of different companies, their rate of return, future trends and their strengths and weaknesses. In the theoretical section of the thesis different factors affecting the capital market were discussed, with the focus being on the risks of an investment. Basic financial statements and ratios were discussed briefly. Next cross sectional and time series techniques to compare the financial statements and ratios were revealed. Most of the information from the theories was later on used in the empirical part of the thesis. In the empirical study, initially the financial statements of different companies were taken to compute the ratios, risk, average return, to make trends and common size statements. Then a quantitative interpretation...
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...General Motors Accounting Analysis and Business Solution | | Table of Contents Introduction2 Hypothesis and Methodology 3 Analysis of Problems4 Variables5 Primary and Secondary Sources6 Resources6 Sample………………………………………………………………………………………………………7 Test Statistics……………………………………………………………………………………………….8 Final Recommendations…………………………………………………………………………………….9 Conclusion………………………………………………………………………………………………...10 Appendices………………………………………………………………………………………………..11 Survey……………………………………………………………………………………………………..12 References…………………………………………………………………………………………………13 Introduction Every time you pick up a newspaper and read the business section, you hear about a major company having some sort of financial problems. These problems are most likely a result of accounting errors and in some instances because of these errors, companies have had major financial issues they could not recover from. Over the years General Motors has been one of those companies. General Motors Company, commonly known as GM, is an American Multinational Corporation, headquartered in Detroit, Michigan. GM designs, manufactures, markets and distributes vehicles and vehicle parts and as well as sells financial services. General Motors produces vehicles in 120 countries under ten different name brands (General Motors Corp.). Recently, management at General Motors has decided to start tracking the number of errors in the accounting department. The number of errors will be tracked per accountant and...
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...General Motors’ Strategic Analysis By Cyriac Thomas (cpg07bm025) [pic] Automotive Industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2007, more than million motor vehicles, including cars and commercial vehicles were produced worldwide. In 2007, a total of 71.9 million new automobiles were sold worldwide: 22.9 million in Europe, 21.4 million in Asia-Pacific, 19.4 million in USA and Canada, 4.4 million in Latin America, 2.4 million in the Middle East and 1.4 million in Africa. The markets in North America and Japan were stagnant, while those in South America and Asia grew strongly. Of the major markets, Russia, Brazil and China saw the most rapid growth. In 2008, with rapidly rising oil prices, industries such as the automotive industry, are experiencing a combination of pricing pressures from raw material costs and changes in consumer buying habits. The industry is also facing increasing external competition from the public transport sector, as consumers re-evaluate their private vehicle usage. The United States is the world’s largest consumer market for light vehicles, passenger cars and light trucks. The United States auto industry is dominated by the Big Three or General Motors, Ford Motors and Daimler/Chrysler. These three account for roughly a little over half of the production of cars and light trucks in the industry. What has currently...
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...Ford Motor Company (Case Analysis) Group #6- TGAA TTH 1:00 Member 1- Taylor O’Neill Member 2- Knyra Ratcliff Member 3- Alex Perkins Member 4- Xu Han Member 5- Kevin Carter Member 6- Alex Dundon/ Nick Tran Presentation Date: 11/17/15 Introduction Our group has chosen Ford Motor Company as our case analysis subject. Ford is an American multinational automaker and was founded by Henry Ford in 1903. Ford Motor Company is the second largest automaker in the United States and is also the fifth largest automaker in the world. Throughout the paper we will be sharing background information of the company such as the vision statement, mission statement, company history, the industry, and our company’s strategy. We will also be sharing the elements of Ford’s internal and external environment (includes historical and competitor financial information), problem statements, possible alternative solutions to those problems, and our recommendations as to which alternative solutions would be best used in response to the problems at hand. Towards the end of our case analysis on Ford Motor Company there is a visual present for both the SWOT analysis and the grand strategy matrix. We have provided appropriate and significant content in completion of this case analysis. Background Vision Statement “To become the world's leading Consumer Company for automotive products and services. (Homepage, 2015)” Mission Statement “One Team. People working together as a lean, global enterprise...
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...Financial Analysis of General Motors and Toyota General Motors Co. is an automobile company, which develops, manufactures and markets cars, trucks and parts worldwide. The company operates through the following automotive segments: GM North America, GM Europe, GM International Operations and GM South America. The GM North America segment sells vehicles under the brands Chevrolet, GMC, Buick and Cadillac with sales, manufacturing and distribution operations in the U.S., Canada and Mexico and distribution operations in Central America and the Caribbean. The GM Europe segment sells vehicles under the brands Opel, Vauxhall and Chevrolet with sales, manufacturing and distribution operations across Western and Central Europe. The GM International Operations segment sells vehicles under the brands Buick, Cadillac, Chevrolet, Daewoo, FAW, GMC, Holden, Isuzu, Jiefang, Opel and Wuling brands with sales, manufacturing and distribution operations in Asia-Pacific, Russia, the Commonwealth of Independent States, Eastern Europe, Africa and the Middle East. The GM South America segment sells vehicles under the brands Chevrolet, Suzuki and Isuzu with sales, manufacturing and distribution operations in Brazil, Argentina, Colombia, Ecuador and Venezuela. It also provides automotive financing services through its subsidiary, General Motors Financial Co., Inc. (GM Financial). It finances its loan origination volume through the use of credit facilities and securitization trusts that issue...
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...term capital budgeting. Can you suggest a company, or industry, where this appears to be true. How? Why? Instant gratification is important in today’s society. People do not have the time in their busy lives to wait on much. Companies also focus on instant gratification and make decisions to help bring in quick returns to satisfy investors. Strong or growing earnings per share is important for investors. Some industries will make decisions that may not be long termed oriented to keep from reducing earnings per share and return on investment. A great example is General Motors. General Motors went a bit too far and had a class action suit against them. They settled in 2008 for $303 million to its shareholders. “The two-year-old class-action lawsuit stems from claims that GM issued false and misleading statements about its finances to artificially inflate the company’s stock price and debt securities “(General Motors 2005). The problem with short term orientation is that the company may take money from other areas to achieve earnings that are expected of them. This money can come from research and development or advertising and have a long term effect on the company. It is still important to keep an eye on short term gains to earn capital that the company needs to provide for its long term goals, but the company still needs to focus on long term and sustainability. Do the recent problems at Toyota suggest that the problem is spreading to other countries? As I stated before...
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...further drive up the already US industry leading profit margin per vehicle. In order to accomplish these goals FORD needs to refocus the Purchasing department’s responsibilities, consolidate and develop suppliers that deliver finished high level components and increase the information flow across all points of the supply chain. These steps will help to introduce a more pull-based system. Contents Issue identification 1 Environmental and root cause analysis 2 Alternatives/Options 3 Recommendations 4 Implementation 5 Monitor & Control 6 Issue identification • Current order to delivery (OTD) is more than 60 days. • Management of large supplier network. • Utilization of IT is lacking. • Purchasing isn’t integrated into Product development. • Independent dealership network has resulted in FORDs loss of control over customer service experiences. This network also breeds FORD vs. FORD sales battles not a Global entity mindset. Environmental and root cause analysis FORDs existing supplier base is a direct product of historical business practice. As the company has grown and demand has increased they have just increased the supplier base. Historically suppliers had been selected based on part/component price within little to no regard to...
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...Abivo Goursam Elvis Dominguez yanjianhai ACC505-Managerial Accounting General Motors Financial Project Tammy Straus, CPA April, 2010 Keller Graduate School of Management. Introduction The objective of the project is to collect and analyze financial information of the main divisions of General Motors Company in order to provide accurate and useful information to the management in their effort to assess a long-run financial viability of the divisions and serve as basis to arrive at a conclusion whether a division should be dropped or retained. Our group related the General Motors Company decision based on the outcome of our research like the one in problem # 13-20 Pg 614 which is about whether or not a Jackson County Senior Services should drop or retain the housekeeping program that provides weekly maintenance services to seniors. The project is divided into the following sections in order to help in the decision making process for deciding which segment or production line has to be dropped, retained or needs improvements. PROBLEM STATEMENT The dilemma that GM face is whether the company should drop or retain a division that does not provide value to the firm because it is not meeting the projected the financial goals set by the management. The objective of the restructuration program is designed to give General Motors Company the competitive edge over companies like Ford, Toyota, Nissan, and many others in the automobile industry. There are three major...
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...Marketing Case Project: General Motors [pic] Zach Bauer Matt Biersdorf Matt Flinn Amy Oliver Danielle Provance Marketing Strategies Professor Paul 11/08/2006 Executive Summary General Motors is one of the largest motor vehicle manufacturers in the world and has been a market leader for over 75 years. The company itself has been going through changes especially in the way that they are creating products and on an internal basis, however, there are some changes that the company still needs to overcome. One of the changes that General Motors has promoted is its’ Flexible Fuel Vehicles which do not run on solely petroleum, rather Ethanol 85. These vehicles cost only $150 more than a normal vehicle, however, the lacking of E-85 fueling stations throughout the nation are making it harder for consumers to take advantage of this “greener” technology while also saving money. The company has also decided to implement a widespread corporate restructuring initiative to help alleviate company debt as a result of rising costs of employee healthcare, benefits, and pensions. Such a plan includes the closure of over a dozen North American plants and manufacturing lines, as well as making substantial job cuts. This three-year endeavor is necessary in keeping General Motors in line with competitors. General Motors is struggling to keep up with its competition in hybrid technology. In order to become a major competitor in the automotive market GM needs to penetrate...
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...Case Study Analysis: General Motors: Packard Electric Division Ufuk Aytacoglu Southern States University – Newport Beach Campus Case Study Analysis: General Motors: Packard Electric Division General Motor’s acquisition of the Packard Company led to a considerable differentiation in the products offered by the Packard Company. Even though the GM struggled throughout the 1980s, the Packard Electric Division of GM grew at rates that were very satisfying for the managers. In year 1990, David Schramm, the chief engineer for Cable and Component Design, was asked by the Product, Process and Reliability Committee to share his opinions on whether the Packard Electric should commit to the RIM grommet for a 1992 model year car. Schramm thought of three possible scenarios for this critical path. The first scenario involved a backup RIM machine in case anything went wrong and products were out of compliance with the manufacturer’s specs. This option was not cost efficient and also was the riskiest of all three choices. Another option was to implement a system that was usable by both manufacturing lines. Design processes would be the most affected stage with this choice considered. Interdependent stages such as logistics would also be in jeopardy. The final choice was their safest and the most applicable. This option could relieve the company in the short-run. However, potential future projects would be given up due to failure of developing technology to create sustainable growth...
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...Automotive Production Levels By Mansi Teraiya Submitted to: Dr. Vandana Mahajan Managerial Economics and Globalization 09/09/2012 1) Brief History of Toyota Motors Toyota Motor Corporation (TMC) is a Japanese multinational automaker headquartered in Toyota, Aichi, Japan. Into 2010, Toyota employed 200,734 people worldwide and was the second largest automobile manufacturer by production. Toyota is the ninth largest company in the world by Revenue. In July, 2012 the company reported that it had manufactured its 200 millionth vehicle. The company was founded by Kiichiro Toyoda in 1937 as a spin off from his father’s company Toyota Industries to create automobiles. 2) Demand Supply Analysis for Toyota Motors To demonstrate the relation between supply and demand of TM worldwide let us focus on production and sales data of TM for last few years. Below are the two tables for TM Production and Sales. From the sales and production data above, we can see that the overall production of TM cars is consumed in the market more than 90% by the consumers. We can observe that there is constant increase in production and sales till year 2008. In 2008, there was an economic slowdown in the world, which impacted production and sales of Toyota motors. From 2010 and 2011 figures, we can see that TM has done well to recover from the recession and we can see that their sales is more than their production in these years. Factors affecting Demand-Supply of TM: At a particular price...
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