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Essay / Research Paper Abstract
This 8 page paper reports and discusses the causes of GM's current financial collapse. Many of the mistakes date back to the 1950s. The writer comments that bankruptcy is a blessing for the corporation as it will allow the company to take actions it was not allowed to take over the years. Bibliography lists 5 sources.
Page Count:
8 pages (~225 words per page)
File: MM12_PGgmclp9.rtf
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Unformatted sample text from the term paper:
saw no way out for this iconic company. Trumbull (2009) did say that this action "marks a historic reversal for an iconic American corporation - and a cautionary tale
for the whole US economy" and Helliker, King and Stoll (2009) commented that it was a most humbling experience for this icon of a global car company. They are both,
of course, quite correct. We all know that the economy really tanked in August and September 2008. Prior to that, Americans were paying more than $4.00 per gallon of
gasoline. Layoffs were rampant. Consumers stopped spending money. If we consider the truth, nobody really needs a new car. If a persons car stops working, they can buy a better
used car. We buy new cars for vanity or other emotional reasons. But General Motors problems did not begin last fall, they began decades ago. The same is true for
the other two major American automakers. This fact has been expressed by consumers with car sales dropping by 40 percent since January 2009 (Helliker, King and Stoll, 2009). General Motors
was riding high in the 1950s and 1960s. Trumbull (2009) comments that GM "opened the door for legions of blue-collar workers to enjoy middle-class lifestyles." They redefined auto making and
management (Trumbull, 2009). The company, however, has gone steadily downhill for many years. Consider their average annual operating margins: 1960s = 8.7%; 1970s = 5.5%; 1980s = 3.0%; 1990s =
1.3% and 2000s = -0.5% (Silver, 2009). These data testify to an imbalance in revenues and expenses. They also provide an example of what can happen to a corporation that
tries to be generous. In the 1950s, GM began paying for pensions and health benefits for retires and by the 1970s, GM was paying the full cost of employee health
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