Analysis of strategic management of Shanghai General Motors

1. Reasons However, how could such a huge kingdom decline and eventually go bankrupt? Looking deeply into Qigen, we can easily find that there are many factors before us. We did a survey, and the popular opinions among netizens recently are: 1. Pensions and medical care are fatally expensive. General Motors lost its financial flexibility and eventually its funds; 2. The skyrocketing oil prices cooled down the sales of GM's fuel-guzzling sports utility vehicles (SUVs) and trucks; 3. The company also The failure to invest in the research and development of hybrid cars as early as possible is another major reason; 4. Declining car sales, deteriorating product mix, and rising raw material costs are the superficial reasons for the significant reduction in profits of automobile companies; 5. Insufficiency of deep-seated competitiveness. Strategic blunder. Organizational flaws. This is the underlying problem. From the above-mentioned comments of netizens, we can still see some problems, and they probably won’t differ too much, but after all, they are not professionals, and their summary is not incisive or specific enough. Well-known car commentator Sharon Silke Carty published an article in USATODAY and pointed out that if General Motors only faces one big mistake, the company may avoid bankruptcy on Monday. But General Motors has made many wrong decisions. Here are the seven major factors that drove General Motors to bankruptcy: 1. It did not file for bankruptcy early. In 2005, General Motors was asked whether filing for bankruptcy would be more conducive to the company's reduction of labor costs. Debt and too many dealers, but then General Motors CEO Rick Wagoner (Rick Wagoner) still firmly opposed General Motors' filing for bankruptcy until he stepped down. Martin Weiss, president of Weiss Research, said it would have been better for everyone if General Motors had filed for bankruptcy in 2005 because General Motors was stronger at the time and the economy was in better shape and could absorb General Motors' layoffs. 2. Too many incentives After the September 11 attacks in 2001, General Motors was praised for taking a quick and decisive step: offering consumers zero-interest credit for five years. But in the years that followed, GM continued to increase incentives. Edmunds.com industry analyst Jesse Toprak said that once GM offers large-scale incentives, it will be inextricable because other competitors will also offer incentives. 3. Abandoning the EV1 electric vehicle project Wagner once said that his biggest mistake was giving up the EV1 electric vehicle project. General Motors gave up its vast lead in electric vehicle technology to Toyota's Prius hybrid. Al Benchich, a retired United Auto Workers (UAW) representative, said that by abandoning the EV1 electric vehicle project, General Motors lost the opportunity to give the United States an advantage in clean energy vehicle manufacturing. 4. Sell a controlling stake in GMAC. For many years, a running joke about General Motors was that the company was a bank that made cars. GMAC's revenue has always been higher than that of the company's auto business. In 2006, facing a cash shortage, General Motors sold 51% of GMAC's shares to private equity fund Cerberus. "This was a major mistake," said Pat O'Keefe, president of O'Keefe & Associates, a business restructuring consulting firm. "GMAC was a cash cow for General Motors." 5. Ignore Jerome York Fall 2005 , billionaire Kirk Kerkorian acquired 10% of General Motors' stock and became General Motors' largest shareholder. He then made his assistant, Jerome York, a GM director and worked to promote an alliance between GM and Nissan and Renault. Although the alliance was unsuccessful, York showed his foresight. York said earlier in 2006 that GM should take a more realistic view of market share and revenue expectations, cut redundant products and brands, sell or close unprofitable businesses and look at GM from a new perspective. He also said that the above measures need to be taken quickly. York resigned as a GM director eight months later and sent a scathing letter to the GM board saying he had reservations about GM's ability to compete.

6. Mistakes in acquiring Fiat shares. General Motors' acquisition of 20% of Fiat shares for US$2.4 billion in stock seems to be a good deal. This transaction can increase General Motors' market share in Europe and enhance General Motors' global competitiveness. But later, Fiat CEO Gianni Agnelli passed away, and problems with General Motors' acquisition of Fiat began to emerge. Under the terms of the deal, Fiat has the right to force General Motors to acquire all of its shares. But General Motors decided to pay Fiat $2 billion in 2005 to cancel Fiat's rights. Fiat used the funds to rejuvenate itself and will now become the owner of Chrysler. 7. Overreacting to the boom in the truck market General Motors is often criticized for producing too many sports utility vehicles (SUVs), but when Ford originally launched the Explorer SUV in 1990, SUVs did not receive GM's attention. "We've always thought of ourselves as a 'car' company," Wagoner said. Please adopt if you are satisfied