...Durant on September 16, 1908. At its inception, GM owned only the Buick Motor Company, but acquired Oldsmobile, Cadillac and Pontiac within ten years of its formation. Demand for automobiles heightened between 1910-1929, allowing General Motors to set the standard for production, design and marketing innovation. GM diversified their selection and opened more than a dozen new plants outside of the United States. In 1927, the head of GM's design studio, Harley Earl, designed the LaSalle which marked the beginning of true automotive design as it was far less boxy than the Ford Model T. "In 1940, former GM President William Knudesen was chosen by President Roosevelt as Chairman of the new Wartime Office of Production Management." During WWII, GM supplied the Allies with more goods than any other company, delivering more than $12 billion worth of materials including airplanes, trucks and tanks. Between 1960-1979, environmental concerns led to a downsizing of vehicles across all GM lines, making it the largest reengineering program ever undertaken in the industry. The emphasis on environmental responsibility ushered in an age of lighter, more fuel-efficient vehicles. GM was the first to offer an air bag in a production car, and they introduced the catalytic converter to reduce emissions. This technology is still used by the entire auto industry today. After Germany and Japan recovered from the devastation of WWII, they began exporting cars to the U.S which eroded GM's dominance of the...
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...……….…p 4 Extenal Factors……….…..…………………………..……….………………….p 5 III - Discuss the latest stage of the new (smaller) GM……………….………...p 6 What are the characterisics of the new GM?..………………………………...…p 6 Some encouraging signs of recovery………………………………………....….p 9 Threats regarding GM’s trials to regain its golden past………………………….p 11 Summary and Observations……………………………………………………...p 13 IV - With a majority government ownership, what operational and management challenges might GM’s management confront when trying to regain its golden past?…….………………………………….………..p 14 Operational Challenges..………………………………………………………….p 14 Management Challenges………………………………………………………….p 15 Summary and Observations………………………………………………………p 16 V - Critically Analyse Whether it was GM’s Failure or its Competitors’ enormous success in cost savings and innovation that brought about GM’s demise…………………………..…...….……………………..…….….….p 17 Cost Savings - a poorly designed cost structure……...………………………….p 17 Innovation Processes…………….…………..…………………………………..p 18 Summary and observations……………………………………………………...p 21 VI - Conclusion……………….……………………………………………….….p 22 VII - References……………………………………………………….……….....p 23 2 I - Introduction General Motors (GM) is an American multinational which was founded by William Durant in 1908. It is known as one of the world’s largest auto manufacturers. GM employs 209,000 people around the world and produces...
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...largest car and truck manufacturers reaching back more than a century in 1908, when William C. Durant founded General Motors Corporation. He brought together 25 independent car companies, which included Oldsmobile, Cadillac and Oakland, known as Pontiac. General motors was just a holding company for these independent car companies. Durant left the General Motors firm in 1911 and went on to be co-founder of the Chevrolet Motor Company with Louis Chevrolet. General Motors main competitor was Ford Motor Car Company, owned by Henry Ford, who developed the Model T car. In 1918, Chevrolet entered the General Motors fold as it became part of the Corporation. The first GM car was built in 1918 and it was the Chevrolet 490. General Motors went through many phases of development from 1910-1929. GM’s new design over Ford’s Model T design, set the place for production, design and the marketing innovation of vehicles. GM’s first diversification took place when they added Chevrolet. They used its philosophy and strategy for marketing. Today, GM is one of the largest automakers in the world and the global headquarters is located in Detroit, MI. By the 1930’s, GM began to start in aircraft design and manufacturing by buying Fokker Aircraft Corp of America and Berliner-Joyce Aircraft and merging them into General Aviation Manufacturing Corporation. 1948, GM divested North American Aviation as a public company and never had major interest in the aircraft manufacturing industry again. GM also bought...
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...S.W.O.T Analysis of five fortune 500 companies 1. General Motors S- GM has a strong brand portfolio, meaning their name is well recognized and trusted. Second Gm has a growing business in the pacific and latin American region. Gm also has very large scale operations W- Gm has a declining market share, and they have had many recalls due to malfunctions in their vehicles. Gm also has a declining financial performance, meaning they are not selling a lot of cars. O- Gm has an increasing demand for their hybrid electric vehicles. There are many opportunities in merging markets, and GM is constantly making new models. T- There is a declining demand for light vehicles in the US. The prices of raw materials is constantly rising, and the emissions standards are continuously getting stricter 2. Ford motors S- Ford has strong engineering capability, a wide network of distributors and dealers, and their employees have a high productivity rate. W- Ford has a continued decline in market share, many product recalls, like the firestone tires which cost them billions, declining operating efficiency and weak returns O- Ford has many opportunities in India and China, ford launched new models of hybrid vehicles, and there is a increasing demand for dual fuel vehicles. T-Ford has a sluggish light vehicle production in developing markets, too many European Union vehicle regulations, and a big economic slowdown in the US 3. Target S- Targets revenue increases every...
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...Car Warranty Accruals Joshua McClellan, November 16, 2015 Car Warranty Accruals Joshua McClellan, November 16, 2015 Inaccuracies in generating cost estimates Inaccuracies in generating cost estimates Memorandum: To: Chase Chasington, General Warranty Manager, Ford Co. From: Joshua McClellan, Accounting Date: November 16, 2015 Subject: Warranty Estimates and Costs Here is the report I put together to summarize the current state of warranty costs in the car industry. It is as we suspected. Warranty accrual methods are inaccurate at best, and actual warranty costs are very different from estimated amounts. I believe this can be remedied with time and effort, however. I hope the information presented in this report will help you to convince the higher ups that changes are needed to make accurate cost and profit projections. The solution to this problem, although clear, is not easily defined. We will need to take further action to fully define what steps need to be taken to better estimate warranty costs. I am grateful to the help of my fellows in the accounting department. Their assistance in gathering data on costs was invaluable. I also appreciate the opportunity you gave to stand out by approving my request to research this topic. Table of Contents Page iii: Executive Summary Page iv: List of Illustrations Page v: Introduction Page v: Warranties and Accruals Page x: Actual costing Page xi: Recalls Page xii: Warranties and Sales Page...
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...July 3 – 6, 2012 Car Recalls: A Problem Unique to Toyota or For All Car Makers? Kamrul Ahsan School of Management and Information Systems, Faculty of Business and Law Victoria University Australia Abstract Often automobile recalls are drawing media and public attention. Influenced by Toyota’s recent automobile recalls 2009-2010 this research conducts an empirical study on historical car recalls. The research uses secondary data from recall websites maintained by public and private organizations. For different car model year and manufacturer the study looks at frequency of recalls, recorded customer complaints, and yearly sales data. Analysis shows recalls are a common event with the majority of recalls initiated by only a few car makers. Though car makers use many eye catching and popular quality and customer care slogans and programs, many popular car makers still face valid customer complaints and consequently face many unwanted recalls. This study identifies that most recalls occur during the first five years of the car model year. This preliminary study of automobile recalls can be further extended at a later stage to identify key causes of recall. Keywords Product recalls, Reverse logistics, car recalls, product returns, closed loop supply chain 1. Introduction Though manufacturers use state-of-the-art operations philosophies, tools and techniques, it is difficult to make the perfect product and products often need to be recalled. Recalls occur when the customer...
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...KELLER GRADUATE SCHOOL OF MANAGEMENT Group Class Project Toyota Group II Class: GM 591 Instructor: Gerardo H. Chaljub Executive Summary Toyota Motor Corporation is a multinational corporation headquartered in Japan and is the world's largest automaker. As of 2008, Toyota employs approximately 316,000 people around the world. In 1934, while still a department of Toyota Industries, it created its first product Type A engine and in 1936 its first passenger car the Toyota AA. The company was eventually founded by Kiichiro Toyoda in 1937 as a spin-off from his father's company Toyota Industries to create automobiles. Toyota currently owns and operates Lexus and Scion brands and has a majority shareholding stake in Daihatsu Motors, and minority shareholdings in Fuji Heavy Industries Isuzu Motors, and Yamaha Motors. The company includes 522 subsidiaries. In January 2009 it announced the closure of all of its Japanese plants for 11 days to reduce output and stocks of unsold vehicles. Toyota Philosophy: Toyota's management philosophy has evolved from the company's origins and has been reflected in the terms "Lean Manufacturing" and Just in Time Production, which it was instrumental in developing. The Toyota Way has four components: 1) Long-term thinking as a basis for management decisions, 2) a process for problem-solving, 3) adding value to the organization by developing its people, and 4) recognizing that continuously solving root problems drives organizational learning...
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...Thomas University This research was supported in part by a grant from the BUS 673 management writing & reporting class. Correspondence concerning this article should be addressed to Bing Bai, Department of Business, St. Thomas University, 16401 NW 37th Avenue, Miami Gardens, FL 33054 Contact: b0771276@stu.edu Introduction 2009, by the impact of the economic downturn in North America, the auto market is also showing a downward trend, the U.S. auto market, sales reached bottom in recent years, a decline of more than 20%. With the slow recovery of the economy in North America, as well as various stimulus policies play a role, so that the downward trend in remission. In 2010, total sales of U.S. automotive (car, SUV, MPV, pickup truck) reached 11,590,274, an increase of 11% year-on-year, U.S. vehicle sales remained year-on-year growth of 11% in January-July 2011. Undergo the shrinking of automobile market, although the United States rely on to curb the momentum of a sharp decline in the automotive market policy factors to a certain extent, the government "TM" subsidies just one pin short-term cardiac and unable to drive the stable recovery of the automotive market. The decline of the Big Three, but also to the global automotive industry, the research and development of new automotive technologies put on the agenda, energy-saving, environmentally-friendly automotive products, technology has become so rampant, global vehicle manufacturers and...
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...Business Strategy (Ford) Competitive Strategy Ford adopted their latest business strategy in 2007. They call it their One Ford Plan. The One Ford plan is an expansion of their four-point business plan for achieving success globally. The four-point business plan first consists of aggressively restructuring to operate profitably at the current demand and changing model mix, and then to accelerate development of new products their customers want and value. The last two points include financing their plan and improving their balance sheet and finally to work together effectively as one team. Being a global company, it is important for Ford to be able to predict the percent of international sales from their total sales. In 2000, 72% of Ford’s total sales came from the U.S. and the other 28% came from Europe, Asia Pacific and Africa. They have predicted in 2020 that only 43 % of their sales will come from the U.S. with 25% from Europe and 32% from the Asia Pacific and Asia. They are not predicting this on the assumption that sales in the U.S. are going to decrease they just believe that the sale in the Asia Pacific and Africa are just going to increase dramatically. Since Ford is a major multinational company, their activities have far reached environmental, social and economic impacts. The first part of their value chain analysis is Product Planning and Design. This is where they decide what products that are going to make, what technology they will develop and implement and...
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... Company Overview General Motors (GM) is an American global car manufacturer headquartered in Detroit Michigan. Employing 202,000 people, GM produces automobiles in 31 out of the 157 countries in which it conducts business. In 2011, GM succeeded in surpassing Toyota and Volkswagen with the largest number of sales worldwide, 9.03 million vehicles1. At the heart of General Motor’s charge is customer satisfaction: “At the new General Motors, we are passionate about designing, building and selling the world’s best vehicles. This vision unites us as a team each and every day and is the hallmark of our customer-driven culture.”2 Background Information As the world emerged into the 20th century, automobiles were viewed as new, cutting edge technology. Little did the world know how dependent economies would become on this “carriage with no horses.” In order to meet the growing public demand for automobiles, new companies emerged on a widespread scale. Among the first on the scene was General Motors founder, William “Billy” Durant who founded the company on September 16, 19083. Throughout the first few decades after the company’s creation, General Motors only held possession of Buick Motor Company, but as the years progressed General Motors acquired an additional twenty car manufacturers including Oldsmobile, Cadillac and Oakland, also known as Pontiac. After the world recovered 1 http://www.freep.com/article/20120119/BUSINESS0101/120119015/GM-again-world-s-largest-automakter?odyssey=tab|topnews ...
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...strategy, and successful product mix in connection with its relationship to parent General Motors and its rivalry with Ford. Chevrolet has a long history of success in developing and marketing cars, trucks, and SUVs that are practical, sporty, and affordable. The brand's relationship with General Motors is both a strength and a weakness, especially in the aftermath of the federal government's financial bailout of General Motors in 2008. Government demands for improved fuel economy and ever changing customer needs and preferences will be constant challenges as Chevrolet looks toward its next 100 years. Themes: Product innovation, product mix, branding, product strategy, competition, corporate reputation, evolving technology, customer loyalty, government regulation, international marketing General Motor's (GM) Chevrolet brand celebrated its 100th anniversary in 2011. Throughout its history, Chevrolet has launched many different vehicle models, some of them widely successful and others deleted from the product mix shortly after introduction. Over the years, the company has transitioned from an American icon into a worldwide brand known for quality and durability. Despite numerous successes and failures in its history, including the recent bankruptcy and bailout of parent company GM, Chevrolet is still going strong after a century of product innovation. A History of Product Innovation Ironically, Chevrolet exists because of its top competitor, Ford Motor Company. William Durant...
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... On February 24, 2010, Akio Toyoda, the grandson of Toyota Motor Corporation’s founder, Kiichiro Toyoda, endured a grueling question-and-answer session before the U.S. House of Representatives Committee on Oversight and Government Reform. The committee represented just one of three Congressional panels investigating the 2009-2010 recall of Toyota vehicles related to problems of sudden acceleration and the company’s delay in responding to the crisis. Signs of the coming recall crisis began as early as 2006 when the National Highway Traffic Safety Administration (NHTSA) opened an investigation into driver reports of “surging” in Toyota’s Camry models. The NHTSA investigation was closed the next year, citing no defects. Over the next four years, Toyota, known in the industry for its quality and reliability, would quietly recall nearly nine million Toyota and Lexus models due to sudden acceleration problems. Toyota’s leadership, widely criticized for its slow response in addressing the problems, now had to move quickly to identify a solution that would ensure the safety of its vehicles, restore consumer confidence, protect the valuable Toyota brand, and recoup a plummeting share price. Akio Toyoda testified: I fear the pace at which we have grown may have been too quick. I would like to point out here that Toyota’s priority has traditionally been the following: First, Safety; Second, Quality; and Third, Volume. These priorities became confused, and we were not able to stop, think...
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... On February 24, 2010, Akio Toyoda, the grandson of Toyota Motor Corporation’s founder, Kiichiro Toyoda, endured a grueling question-and-answer session before the U.S. House of Representatives Committee on Oversight and Government Reform. The committee represented just one of three Congressional panels investigating the 2009-2010 recall of Toyota vehicles related to problems of sudden acceleration and the company’s delay in responding to the crisis. Signs of the coming recall crisis began as early as 2006 when the National Highway Traffic Safety Administration (NHTSA) opened an investigation into driver reports of “surging” in Toyota’s Camry models. The NHTSA investigation was closed the next year, citing no defects. Over the next four years, Toyota, known in the industry for its quality and reliability, would quietly recall nearly nine million Toyota and Lexus models due to sudden acceleration problems. Toyota’s leadership, widely criticized for its slow response in addressing the problems, now had to move quickly to identify a solution that would ensure the safety of its vehicles, restore consumer confidence, protect the valuable Toyota brand, and recoup a plummeting share price. Akio Toyoda testified: I fear the pace at which we have grown may have been too quick. I would like to point out here that Toyota’s priority has traditionally been the following: First, Safety; Second, Quality; and Third, Volume. These priorities became confused, and we were not able to stop, think...
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... On February 24, 2010, Akio Toyoda, the grandson of Toyota Motor Corporation’s founder, Kiichiro Toyoda, endured a grueling question-and-answer session before the U.S. House of Representatives Committee on Oversight and Government Reform. The committee represented just one of three Congressional panels investigating the 2009-2010 recall of Toyota vehicles related to problems of sudden acceleration and the company’s delay in responding to the crisis. Signs of the coming recall crisis began as early as 2006 when the National Highway Traffic Safety Administration (NHTSA) opened an investigation into driver reports of “surging” in Toyota’s Camry models. The NHTSA investigation was closed the next year, citing no defects. Over the next four years, Toyota, known in the industry for its quality and reliability, would quietly recall nearly nine million Toyota and Lexus models due to sudden acceleration problems. Toyota’s leadership, widely criticized for its slow response in addressing the problems, now had to move quickly to identify a solution that would ensure the safety of its vehicles, restore consumer confidence, protect the valuable Toyota brand, and recoup a plummeting share price. Akio Toyoda testified: I fear the pace at which we have grown may have been too quick. I would like to point out here that Toyota’s priority has traditionally been the following: First, Safety; Second, Quality; and Third, Volume. These priorities became confused, and we were not able to stop, think...
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...Toyota in North America Donald L. Woolridge, Sr. Indiana Wesleyan University February 20, 2013 Course ADM537A Toyota in North America This paper will provide an overview and history of Toyota in general and the company’s operations in North America and its product lines specifically; share comments on the company’s organizational structure and senior management leadership style; discuss its nearest competitors – Ford, GM and Chrysler, known as the Detroit 3; share the weighted average cost of capital; provide insight in the company’s rationale/methodology for evaluating capital budgeting opportunities in North America; review the economic forecast for the industry; show the characteristics of common stock and bonds, share key financial ratios for three years, comparing to industry and nearest competitors; and in conclusion share a strong, fact-based summary of why or why not a person should make an investment in the common stock of Toyota. Historical Overview Toyota is a family-owned and operated company with very humble beginnings. Sakichi Toyoda, his son, Kiichiro Toyoda and Taiichi Ohno all played an important role in not only laying the foundation for what would become the automotive giant Toyota, but also in the development of the system that has revolutionized lean manufacturing; the Toyota Production System (TPS) (ToyotaGeorgetown.com, 2006-2013). Sakichi Toyoda invented the automated loom which ensured quality of product by stopping when threads...
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