Gm Case Study

Financial Health and Performance The financial health of GM has been rocky over the last decade, one remarkable moment being the filing of bankruptcy and the subsequent government bailout. There have been many ups and downs for the corporation but for the last few years (Figure 4) profits again have risen to be the standard. Since the company’s recovery from bankruptcy their status has stabilized financially and in performance. Something is to be said that they have been in business for over 100 years and are still going strong earning them once again the title of top automobile manufacturer of the world.

Honda has consistently been profitable year after year (Figure 5) since their inception, the only exception being that in recent years,

For example, due to the increase in gasoline prices over the last several years GM saw a large decline in its sales. The majority of their product line is not energy efficient and is very costly to fun on gasoline. Whereas, Honda vehicles are much more compact and efficient making their products attractive to buyers. Both companies have faced reduced sales due to the poor economies and lower profit margins because fluctuating exchange rates. GM and Honda both took large hits to profits and more importantly their reputation as a result of recalls. General Motors recently has had to pay out $2.6 billion dollars due to a faulty ignition switch (Alter), but an even harder loss to overcome was the loss of 104 lives and 191 injuries from crashes as a result of the defect. GM is not alone with this issue though; Honda also fell victim to a recall of a defective airbag inflator in over 34 million

Each and every one of them having the potential to discover new technology or create some new edgy design. So in the case of GM their popularity can essential be an industrial threat. There is a new influx of consumers that are looking for individuality, economy and trends. GM has been considered by many in the industry as “old-school” and with the rise of “new-school” they are going to have to be very pro-active about keeping up with the desires of these new consumers. Notably, Tesla has grabbed a large consumer base that is attracted to their non-aggressive sales approach and the idea of made-to-order vehicles. Markedly, Toyota and Hyundai are a large threat because they share target markets. In contrast, Honda has some self-induced threats because of their manufacturing preferences. Honda refuses to modernize its production lines in order to keep people employed, the result being increased labor costs which in turn means higher end prices for consumers. Honda can expect future threats from other manufacturers as they delve into more environmentally friendly vehicles. There is a big push around the world to lessen our carbon footprint and lower emission to reduce greenhouse effect. Honda has always been on the frontline of innovations in these areas so they will have to be steadfast in order to remain top of the class in the coming