Internationalization of General Motors
This paper examines the expansion of General Motors overseas in its various phases, as well as triggers for internationalization and the problems faced during the process. The paper also considers what benefits have been achieved through international growth, and how the company can be classified with regards to Bartlett and Ghosal’s 4 typologies. Finally, the paper discusses the concept of a “world car,” meeting the demands of customers across the globe.
General Motors, International; Internationalization; Globalization; Multinational; Growth Strategy; Volkswagen; Bartlett; Ghosal
1. Internationalization of GM
1.1 Early History
In the early 1900’s, the first companies that would form the company as we know it today began to emerge. The first of these was the Olds Motor Vehicle Company (later Olds Motor Works, makers of the Oldsmobile) in 1897, followed by Cadillac Automobile Company in 1902 and Buick Motor Company in 1903.
Under the leadership of William Durant, September 16th 1908 marked the birth of the General Motors Company, initially incorporating the Buick Motor Company. GM then purchased Olds Motor Works in November 1908, a 50% stake in the Oakland Motor Car Co (later Pontiac Motors) in January 1909, and Cadillac in July 1909. During its first few years of operation, GM also acquired a number of parts and accessories manufacturers, such as Champion Ignition Company (predecessor of AC Spark Plug) and Fisher Body Company, and also attempted to purchase Ford Motor Co. but were refused a $9.5 million loan from their bankers (GM.com Corporate History).
In 1911, however, as a result of the outstanding debts that the company had acquired, bankers stepped in and rem...
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On May 1, 1954, Nash and Hudson joined, forming American Motors. (Foster 11) Mason was named chairman of the board, president, chief executive officer, and general manager. His assistant George Romney was named vice president, and Barrit became a director of the company.
They had already acquired the assets of Kenworth in 1945 and was planning on becoming a player in the heavy truck market. Pacific Car made Peterbilt Motors a wholly owned subsidiary. Peterbilt finally carried its own tradition while retaining its product line. In later years, the Peterbilt Company has created historical events and inventions.... ...
Since the beginning of the United States the American people have been on the move. Public transportation has played a major role in the development of this nation and in bringing its citizens together. In the book “Divided Highways”, author Tom Lewis takes the reader on a journey of the building of the Interstates and the consequences(good and bad) that came from them. Lewis believes that the Interstates are a physical characteristic of America and that it shows “all our glory and our meanness; all our vision and our shortsightedness”(xiv).
The automaker Chevrolet has experienced much technological change in the past 104 years. Although it, Chevrolet, is a French name, it is an American car company. It was primarily founded by William C, Durant, along with Louis Chevrolet, on November 3, 1911. It wasn’t until six years of existence that it became part of the Automotive Division at General Motors, otherwise known as GM. Durant had previously tried to buy out Ford and failed. This caused him to resort to co-founding Chevrolet. The first car sold by the company commonly called Chevy was the Classic Six, at the price of 2,500 dollars. Chevy started producing these vehicles in 1912-1913. The car’s value may seem like pocket change but that is the common day equivalent of roughly 57,000
In 1903 the Ford Motor Company came to be. Ford, along with other investors including John and Horace Dodge raised $28,000 and in the first 15 months produced 1700 Model A cars. These cars were known for their reliability, yet were still too expensive for the average American. Over the next five years Ford and his engineers produced models with the letters B through S, the most successful of which was the Model N (priced at $500) , and the least successful was the Model K (priced at $2500). It was obvious from the Model N that the key to the companies success lay in inexpensive cars for a mass market. The answer that Ford and the American consumer were looking for was the Model T.
As the automobile industry made its first appearance in the early 1900s, General Motors had already slowly begun its formation. GM was founded in 1908 by William C. Durant, a carriage manufacturer of Flint, Michigan, and today operates manufacturing and assembly plants and distribution centers in many countries, including Canada . Its major products include automobiles and trucks, a wide range of automotive components, engines, and defense and aerospace materiel. General Motors has a long history of business and technological innovation designed to deliver ever-increasing value to their customers and society. GM today has manufacturing operations in more than 30 countries and its vehicles are sold in about 200 countries.
General Motors is knocking on the door to world class business performance. Ohmae’s five stages of global operation support General Motors aspirations. From stage one to stage five there are significant differences to becoming a global organization. For instance, stage one, states that a company supports arm’s length customer export activity by a domestic company that links up with local and distributors to function. This stage represents the entry level global corporation. General Motors is at stage 4 of Ohmae’s five stages of becoming a global corporation, because it has exemplified the following traits: Systems and tools used globally not just at headquarters, R&D, Engineering and other business operations have a global focus, and all support functions are applied globally. (MFGO 601, WK. #2 Lecture Notes) An example of Ohmae’s, stage ...
On 4 May 1904, Charles Rolls and Henry Royce met for the first time in the Hotel Midland, Manchester. A shareholder of F.H Royce and company, Henry Edmunds and Claude Johnsn made the historic meeting. 10 Royce automotive were manufactured and Johnson noticed Rolls was getting frustrated just to sell foreign imports. A day when Rolls and Edmunds travelled to Manchester. On the journey to the Manchester Rolls said Edmunds that he need to manufacture a motor car along with his name on it. After seeing the 10 Royce, Rolls thought he finally got a car he was searching for. Despite their dissimilar scenarios Charles and Henry made a partnership and soon after driving a car Rolls decided to sell the cars under the name ...
After graduation, Alfred began working in a small machine shop in Newark, New Jersey, called the Hyatt Roller Bearing Company. During his time as an employee, Alfred looked for a way to improve the company share and was able to convince the company to begin manufacturing antifriction bearings for automobiles. In 1899, at the age of 24, Alfred Sloan became president of Hyatt Roller Bearing Company and assumed responsibility for all aspects of the business. Under his leadership and direction, Hyatt grew rapidly and the company’s bearings became the standard for the automobile industry. In fact, Oldsmobile was the first automotive customer for Hyatt, with other manufacturers soon following. In 1916, Hyatt Roller Bearing Company along with other automotive manufacturers, merged with United Motors Corporation. Alfred Sloan, Jr. was appointed president of the newly formed entity. After two years of continued growth, United Motors merged with General Motors Company to form General Motors Corporation. Again, Alfred assumed a leadership role with the merge, becoming Vice President in Charge of Accessories and serving as a member of the Executive Committee. His success in the company continued and he became President of...
In a final move to regain control, Durant offered GM stockholders five shares of Chevrolet stock for every one share of GM stock. Though GM stock prices were exorbitantly high, the market interest in Chevrolet made the five-for-one trade irresistible to GM shareholders. With the sale, concluded on May 2, 1918, Durant regained control of GM. Just two years later, however, he was pushed out for good by Pierre S. DuPont, whose family’s powerful chemical company had begun investing in the fledgling auto industry by buying GM stock in 1914. Pierre DuPont subsequently rose to the chairmanship of GM’s board and became president in 1920.
When you look at the history of General Motors, you will find a long, rich heritage. General Motors came into existence in 1908 when it was founded by William "Billy" Durant. At that time Buick Motor Company was a member of GM. over the years GM would acquire more than 20 companies, to include Opel, Chevrolet, Cadillac, Pontiac, and Oldsmobile. By the 1960's through 1979 was known as a revolution period for General Motors. Everyone was focusing on environmental concerns, increased prices of gasoline lead to the unprecedented downsizing of vehicles. The smaller cars lead to one the largest re-engineering program ever taken in the industry. By 1973, General Motors was the first to offer an air bag in a production car.
Spatz, J., & Nennenkamp, P. (2002, January). Globalization of the automotive industry-traditional locations under pressure. Retrieved January 14, 2012, from http://www.uni-kiel.de/ifw/pub/kap/2002/kap1093.pdf
For example you have the Chevy Tahoe, or you can have a nicer version called the GMC Yukon. Ford made their first care in 1908 with the model T. Ford is the parent company and also owns Lincoln and Mazda. Henry Ford founded the company and is said to be the father of the automotive industry. Ford has introduced many models and also ended many models.
Stonehouse, G., Campbell, D., Hamill, J. & Purdie, T. (2004). Global and Transnational Business (2nd ed.). Chichester: John Wiley & Sons.
Henry Ford began a family automobile business in 1903; this was during the industrial revolution. This business has become the most famous automobile brand in the world. Over the years the business structure had adapted to changes in leadership, markets trends and the economic conditions. The Ford family still controls the company through multiple voting shares, even though it owns a much lower proportion of the equity