GENERAL MOTORS

General Motors

General Motors

Executive Summary

Human Resource Management is not still viewed as a critical strategy in merging companies, especially at the early stages of the process. This is really strange as the cultural incompatibility between the two merging companies causes a lot of obstacles and problems. I believe that Human Resource departments can significantly influence the most. Nevertheless, GM and Chrysler need to take account certain factors in their successful merger strategies.

Nowadays, all companies should constantly adjust and restructure to survive and grow in today's progressively competitive economic environment. Obviously there is no exception for GM and Chrysler. Many companies follow the Mergers and Acquisitions (M&A) process as the radical forms of constant restructuring. However, lack of attention to the human dimensions may prevent success and even may lead to complete failure.

GM and Chrysler are considering Merger and acquisition as fast and efficient way to strengthen and maintain their position in the market place. Yet their success is by no means guaranteed.

The following report offers some recommendations on how human resource management can be used to assure their success, and thereby reduce the numerous social costs associated with their failure.

Considering the regulations of ILO (International Labor Organization), I have analyzed a three-stage model of mergers and acquisitions for GM and Chrysler.

The three-Stage Model shows that HRM is the main issue on the success or failure of GM and Chrysler merger, especially at the combination or implementation stages; however; statistics show that only 15 per cent of mergers and acquisitions achieve their objectives.

At this following report, I am trying to express a systematic, people-oriented approach for effectively doing mergers and acquisitions, from beginning to integration and post-integration.

Considering that the job loss has a strong negative impact on employees and society, companies that are successful and inventive in mergers and acquisitions can create strong social values for their employees and the society. This successively, can lead to job growth over time and provide an edge for the company over the others competitors.

Gunther believes that today there are a lot of attention to the legal, financial, and operational elements of mergers and acquisitions. However, executives who have been through the merger process now recognize that in today's economy, the human resource management is the real key to maximizing the value of a deal.

GM and Chrysler Merger

A list of good reasons for GM and Chrysler's amalgamation:

1. Market dominance; economies of scale.

2. Risk spreading, cost cutting

3. Global reach.

4. Survival5.Acquisition of cash6.Bigger asset base to leverage borrowing.

7. Financial gain and personal power.

8. Acquiring talent, knowledge, and technology.

Three-Stage Model of Merger

The experiences of companies in merger and acquisition activity suggest a model of activity that has three stages:

1) Pre-combination;

2) Combination

3) Solidification

Stage 1 - Pre-Combination

GM and Chrysler need a dedicated and skilled Merging HR leader before implementing the merging activities. The team leader should have a clear knowledge of recruitment, selection, development, appraisal, compensation, and labor relations.

If GM and Chrysler can gather a better understanding and knowledge of the merging process, they will definitely have more chance to be ...