It should be noted that problems within the General Motors did not start due to the current crisis; they began to appear several decades earlier and were caused by serious errors in both strategic and in operational marketing. As a fact, General Motors Corporation owned following automobile brands: Buick, Cadillac, Chevrolet, GMC, Holden, Hummer, Opel, Pontiac, Saturn, Saab, Vauxhall, Wuling and Oldsmobile, as described in GM: Epic failure of vision? Or culture?
Considering the circumstances, having too many brands led to the bankruptcy of GM. The company retained only a few American brands, among them are Cadillac, Chevrolet, Buick and GMC. Moreover, this bankruptcy forced GM to close 13 factories in the U.S. in 2010 and will close another one in 2012. As a fact, more than 21 thousand of workers have lost their jobs, as stated in GM – Branding Failure. The U.S. authorities called the move “collective self-sacrifice” and necessary for the salvation of the company. President Barack Obama has once again confirmed that the bankruptcy of General Motors and Chrysler just means the companies update and improve their efficiency and does not affect the interests of car owners. Of course, authorities could not allow free fall of America’s largest automaker, as well as blue chip of the U.S. stock market – it could lead to unpredictable circumstances for all American economy.
Consequently, the U.S. government has provided $ 50 billion credit to GM in the financial crisis to help one of the biggest companies to avoid complete liquidation. As a result, new General Motors Company was formed, in which 60% belonged to the U.S. government, 12% to the Canadian government, 17.5% to United Auto Workers and 10.5% was divided between main creditors of the concern, as described in After 101 years, why GM failed.
After the bankruptcy, loss-making General Motors brands were closed, the company left only the most profitable Buick, Cadillac, Chevrolet and GMC. I presume that General Motors did not take into consideration the laws of marketing. It should be noted that GM had to close these knowingly unprofitable brands and heavily correct the image of the rest four. However, the company did not do it, which led it to the bankruptcy. It can be said that if we analyze data from a list of Financial Times FT500 over the past few years, we find out that U.S. automakers for many years were losing their market share, giving it to Japanese and German companies. It can be said that American auto industry has for many years, falls into the abyss, yielding more and more market share to the Japanese and Germans. In particular, while GM and Ford dropped from the list of FT500, in 2008 the capitalization of Toyota was $ 173 billion, and Daimler – $ 87 billion. Without any doubts this fact proves that the cause of the collapse of General Motors is not the current crisis, and weakening competitiveness solely because of their mistakes in marketing, which made the successors of the founders of the company. Today, unfortunately, we must admit the fact that the quality of Japanese and German cars is much higher than quality of American cars. I believe that this was terrible mistake in the product management with led to the bankruptcy of the company, as described in Lessons From General Motors Fall from the Top.
Eric Von Baranov. 2010. GM – Branding Failure. 23 June 2011. <http://ezinearticles.com/?GM—Branding-Failure&id=2613981>
GM Failures Continue. 2008. 23 June 2011. <http://www.isis.org.uk/gmFailuresContinue.php>
GM: Epic failure of vision? Or culture? 23 June 2011. <http://productvision.org/blog/gm-culture/>
Lawrence Walsh. 2008. Lessons From General Motors Fall from the Top. 23 June 2011. <http://www.baselinemag.com/c/a/IT-Management/Lessons-From-General-Motors-Fall-from-the-Top/>
Peter Cohan. 2009. After 101 years, why GM failed. 23 June 2011. <http://www.dailyfinance.com/2009/05/31/after-101-years-why-gm-failed/>