Abstract

In this paper we are going to focus on the General Motors Corporation. The paper will identity how is the old General Motors is different with the new General Motors. The paper will also gauge the effects of restructuring cost of the new General Motors. Main purpose of this paper is to identify what were the reasons of the bankruptcy of the General Motors.

General Motors

Introduction

General Motors (GM) is one of the largest automobile organizations that have an existence in more than seventy countries around the world. General Motors is a leading global automotive group, and historically is among the top U.S. companies by revenue. General Motors Company was born as a group of companies in the year 1908 through the initiatives of C. Williams Durant. General Motors (GM) is primarily engaged in the design, development, manufacturing, and marketing of automotive products worldwide.

In FY2010, GM produced 8,714,000 vehicles under the brands, including Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang, Opel, Vauxhall and Wuling. GM's operates in more than 120 countries worldwide.

Discussion

Bankruptcy of General Motors and Old GM

In 1996, GM launched the EV1, marking the beginning of the scandal over 6 years about the sudden disappearance of all-electric model. On 17 October 2005, to avoid having to put themselves under the protection of Chapter 11 of U.S. law on bankruptcy, GM has announced measures to restructure radical: the sale of majority stake in its GMAC finance subsidiary, which was his main source of profit and had a market value double that of GM, but was handicapped in its fundraising by the group's rating. Reduction of employment with 25,000 departures during the period 2005-2008 agreement with the union United Auto Workers (UAW) to reduce the medical costs of its 750,000 employees and retirees, the group announced shortly after the reorganization of certain investments, including the sale of its Subaru (Fuji Heavy Group) to Toyota.

In 2006, an alliance with Renault - Nissan has been discussed and then abandoned. Location of car assembly plants of GM in the world GM's net loss amounted to 2 billion USD. General Motors plans to market by 2010 a fully electric car, the Chevrolet Volt. On 3 June 2008, the company CEO Rick Wagoner said a switch of production to models that consume less fuel. In 2008, General Motors has not been spared the difficulties of the U.S. car market in the first half of 2008. On July 2, while the share price of the group fell to its lowest level in more than 50 years, the investment bank Merrill Lynch raised the possibility of setting the insolvent automaker. On October 9, the action General Motors falling more than 31% on Wall Street fell to its lowest level since 1950. Management says it has no plans to file for bankruptcy.

On December 12, the rescue plan aimed at Big Three, determined by the representatives of Congress to 14 billion USD, is rejected by the Senate, though majority Democrats. The leaders of General Motors (as well as ...