General Motors
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Recent History.
General Motors Corporation is a widely known auto company that is known for its SUVs and trucks. General Motors also owns many sub-companies such as Chevrolet, Buick, Dodge, Jeep, etc. General Motors keeps themselves especially current in the industry with their constant evolving technology within all their vehicles. According to an online forum from Michigan entitled mLive, GM's top three vehicles sold are the Chevy Silverado - C/K Pickups, Chevy Equinox, and the GMC Sierra.
2009 Chevrolet Silverado
In 2004, GM switched directions from their focus on releasing new development on sedans and focussed more on the refurbishment of their light trucks and SUVs all the way through 2007, right before the major auto industry crash. General Motors hit an amazing sales peak for the company in 2005 soaring at a 17.296 million vehicles sold. General Motors believed that focussing on what they're known for, trucks and SUVs, was the best way to drive profits, but were unfortunately abruptly shown that this was not the needed market for the time.
Auto Industry Crash.
In 2004, General Motors had their focus on sedans and creating new technology for them, but switched gears to focus more on their vehicles that drive the main part of their business in refurbishing light trucks and SUVs, which ended up being the wrong decision. From 2003 - 2008, the fuel economy was plummeting and not many auto companies had dove into the more fuel efficient vehicles that people were in need of. Because the prices of fuel were so high, people were driving less and wanted to purchase vehicles that were more fuel efficient. This was the leading cause of General Motors facing bankruptcy.
General Motors was leading the world's auto industry, but in 2007, Toyota crept up from behind taking over the number one spot because of their development of smaller cars. According to The Balance's online article, Auto Industry Bailout (GM, Chrysler, Ford), because of the rapid momentum downwards, the government lent GM $14.3 billion. On May 2nd, 2009 GM fell below $1 a share on the stock market which had not happened since the Great Depression. It was clear that the initial loan they received was not enough and something else needed to be done. The government allowed them an additional $4.4 billion to attempt to stay afloat.
On June 1st, 2009, General Motors entered into bankruptcy where the government dug them out with an $30.1 billion loan to go towards operations for June and July while they went through major changes. The government then in return bought 60% of the company in warrants from common stock and preferred stock, along with the Canadian government who bought 12% and a union health trust who received 17.5%. So unfortunately, all stockholders lost all their investment.
General Motors went through many changes which included paying for union retirees health care benefits by 2010, selling sub-companies Saab, Saturn, and Hummer, shut down 11 factories, closed 40% of its 6,000 dealerships, and cut more than 20,000 jobs. Not only did they cut many jobs from hard working General Motors employees, their bailout plan from the government cost an absolute fortune. In total, General Motors cost the taxpayers $11.3 billion.
On July 10th, 2009 GM officially came out of bankruptcy since their sales increased to about 10.758 million vehicles sold. From there in November of 2010, the government decided to sell back to GM half of its ownership, which gave the general public to purchase shares on the stock market for $33 a share. A few years later in 2013, the government sold back the remainder of their shares to General Motors of 31.1 million, and also received $37.2 billion in return from GM.
As of November 2016, Donald Trump has been elected President of the United States. The importance of this comes from the question of unemployment and how it is going to be improved. President Trump recently has been working with the Big Three and discussing was to create more jobs in the United States. According to The Detroit News, "General Motors Co. in December announced a $5 billion investment in Mexico over six years. GM has four complexes in Mexico with 14 manufacturing plants comprising assembly, engine, transmission, stamping and foundry work which employs about 15,000 people." This is an ongoing problem in the US in that jobs are leaving to countries where labor is cheaper. It is said that workers in Mexico work for as little as $9 an hour. Not to mention the fact that Mexico has complete free trade. In order to deter this, and keep these manufacturing jobs within the United States, President Trump has proposed the idea that auto companies will receive a tax break incentive for keeping jobs within the country, and will have to pay a tax on every vehicle that enters the United States that is built in a different country. This plan has not been put in place yet, but discussion around it is still revolving. Having something like this plan put into place would not only decrease the unemployment in Detroit, but would stimulate a working economy for the entire city of Detroit.
The Future of General Motors.
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It is best said by General Motors themselves, the future is electric. General Motors has seemed to have learned their lesson and plans to stay current in the auto industry by listening to their customers and paying more attention to the markets. Because of this, GM has put much time and money into developing electric cars.
On General Motors official website, they have posted information regarding their up and coming new plans. Their newest edition to the General Motors family is the Spark EV which is an electric car sold in Oregon, Maryland, and California. This new vehicle is fast like a sports car by reaching 0 to 60 in just 7.6 seconds and allowing 82 miles of range cutting average costs of fuel by $150 a month. General Motors has also released vehicles such as the Chevy Bolt which is a family electric car sold in all 50 states, as well as the Chevy Volt and the Chevy Malibu Hybrid. |
2014 Chevrolet Spark EV
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