GM survival essential ?

Feb 26, 2009

For the better part of a century General Motors has been at the centre of the North American automobile industry. When some people talk about the automobile company being allowed to fail I wonder if they truly understand how large and important a company it really is and how integrated it is into the heart of the North American economy in terms of its backward and forward linkages in steel, rubber, glass, technology, auto parts,plastic and finance. Its demise would cut a deep and wide swath of damage within the very heart of the North American economy. GM employs 244,500 people world wide.A large portion of these workers are located in North America. It manufactures cars and trucks in 34 countries. In 2007 its total revenue was over 180 billion US dollars . In 2008 its revenue has declined to 149 billion. Its fourth quarter reported net loss was $ 9.4 billion. GM world wide sold 8.35 million vehicles   . GM 's largest market is the US followed by China, Brazil,the United kingdom, Canada, Russia and Germany. It accounts for 7.2 % of market share in the Asia Pacific region,16.2 % in Latin America, 9.1 % in Europe and
21 % in North America.
It is therefore a behemoth of a company far too important to the North American economy for it to be allowed to fail unless people are prepared for the massive fallout that would flow from such an event.

Clearly restructuring and streamlining and much better management is in order.Dramatic improvements in fuel efficiency, product reliability and appropriate ecological 21st century design is a necessity.Learning from the Japanese would be advisable. But the bottom line should be the return of the company to a healthy balance sheet for the good of its owners( which ought to include the governments that extend it aid), the good of its workers and the well being of the North American economy.