GM’s in big trouble with collosal value eroded. Will the rescue team get this American out of troubled waters?
Hollywood flick Tears of the Sun reminds you of a nation torn-apart by violence; there’re good guys too though, fighting hard to save those bearing the brunt of it all. So why’re we talking about this in an automobile tale? Well, there’s something of this brewing in downtown Detroit (welcome to America, folks!) where there’s nothing short of a murder happening, with General Motors losing 61.09% of its market value during just the past eight months to touch $9.18 billion as on June 11, 2008. Explaining its back-to-the-wall state, in an exclusive revelation to B&E, Greg Martin, Head of communications, GM North America confesses, “The US market has been much more competitive than at any other time...” Naturally, what he meant was that it was to blame for GM’s poor performance in recent days. ‘Negative impact’ are the words because even if were to consider the past three long years, the company has not returned a single year of profit, and its combined aggregate net loss has touched a mind-numbing $52 billion! And for the records, even the most recent Q1 2008 result shows a merciless loss of $3.25 billion! Such is the plight of this auto-maker – murderous indeed! But just like Bruce Willis led his team of soldiers to save those involved, there’s GM’s hero, Rick Wagoner with his management team saving GM for all the precious dimes it’s worth.
So, will he succeed? Unlike past GM conferences, the one on June 3, 2008 was different; rather, very. For once, GM dropped its ‘Go-Green’ attitude and spoke of something more urgent. And there was a new momentum generated besides just Chairman Rick Wagoner using his favorite lines of motivation. “We have made a lot of progress on our turnaround plan. However, recent developments have made it necessary for us to take additional actions,” said Wagoner. These lines were followed-up by a restructuring plan disclosure which would save the company $1 billion in costs over the next three years. Surely a mid-term target and a precious one in these hard loss-making times!
Hollywood flick Tears of the Sun reminds you of a nation torn-apart by violence; there’re good guys too though, fighting hard to save those bearing the brunt of it all. So why’re we talking about this in an automobile tale? Well, there’s something of this brewing in downtown Detroit (welcome to America, folks!) where there’s nothing short of a murder happening, with General Motors losing 61.09% of its market value during just the past eight months to touch $9.18 billion as on June 11, 2008. Explaining its back-to-the-wall state, in an exclusive revelation to B&E, Greg Martin, Head of communications, GM North America confesses, “The US market has been much more competitive than at any other time...” Naturally, what he meant was that it was to blame for GM’s poor performance in recent days. ‘Negative impact’ are the words because even if were to consider the past three long years, the company has not returned a single year of profit, and its combined aggregate net loss has touched a mind-numbing $52 billion! And for the records, even the most recent Q1 2008 result shows a merciless loss of $3.25 billion! Such is the plight of this auto-maker – murderous indeed! But just like Bruce Willis led his team of soldiers to save those involved, there’s GM’s hero, Rick Wagoner with his management team saving GM for all the precious dimes it’s worth.
So, will he succeed? Unlike past GM conferences, the one on June 3, 2008 was different; rather, very. For once, GM dropped its ‘Go-Green’ attitude and spoke of something more urgent. And there was a new momentum generated besides just Chairman Rick Wagoner using his favorite lines of motivation. “We have made a lot of progress on our turnaround plan. However, recent developments have made it necessary for us to take additional actions,” said Wagoner. These lines were followed-up by a restructuring plan disclosure which would save the company $1 billion in costs over the next three years. Surely a mid-term target and a precious one in these hard loss-making times!
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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