General Motors

Type: Public (NYSE: GM)
Founded: 1908
Headquarters: Detroit, Michigan, USA
manufacturing facilities in 30 U.S. states and 33 countries
Key people: Rick Wagoner, Chairman & CEO
Robert A. Lutz, Vice Chairman
Frederick Henderson, CFO
Tom Schowe, CFO
Industry: Automotive
Products: Automobiles, Engines
Website: www.gm.com

General Information

General Motors Corporation, also known as GM or The General, an American multinational corporation, is the world's largest auto company by annual production volume for 2006, and the second largest by sales volume as of the first half of 2007, behind Toyota Motor Corporation. Founded in 1908, in Flint, Michigan, GM employs approximately 284,000 people around the world. With global headquarters at the Renaissance Center in Detroit, Michigan, USA, GM manufactures its cars and trucks in 33 countries. Their European headquarters are based in Zurich, Switzerland.Their Holden headquarters are in Melbourne, Victoria, Australia. In 2006, 9.18 million GM cars and trucks were produced globally under the following brands: Buick, Cadillac, Chevrolet, GMC, Holden, Hummer, Opel, Pontiac, Saab, Saturn and Vauxhall. GM is the majority shareholder in GM Daewoo Auto & Technology Co. of South Korea and has had collaborative ventures in technology and manufacturing with several of the world's automakers. It has ventures with Shanghai Automotive Industry Corporation of China.

GM Parts and accessories are sold under GM Performance Parts, GM Goodwrench and ACDelco brands through GM Service and Parts Operations which supplies GM dealerships and distributors worldwide. GM engines and transmissions are marketed through GM Powertrain. GM's largest national market is the United States, followed by China, Canada, the United Kingdom, and Germany. GM half owns a finance company, General Motors Acceptance Corporation Financial Services, which offers automotive, residential and commercial financing and insurance. GM's OnStar subsidiary is a vehicle safety, security and information service provider.

Marketing

At one time, each of GM's automotive divisions were targeted to specific market segments and despite some shared components, each distinguished itself from its stablemates with unique styling and technology. The shared components and common corporate management created substantial economies of scale, while the distinctions between the divisions created an orderly upgrade path, with an entry-level buyer starting out with a practical and economical Chevrolet and moving through offerings of the different divisions until the purchase of a Cadillac. The divisions were not competing with each other as much as passing along the same customer who would thus always be buying a GM product.

The postwar automobile industry became enamored with the concept of 'planned obsolescence', implemented by both technical and styling innovations with a typical 3-year product cycle. In this cycle, a new basic body shell is introduced and then modified for the next two years with minor styling changes. GM, Ford, and Chrysler competed vigorously in this new restyling environment.

In the New Century

In the late 1990s, the U.S. economy was on the rise and GM and Ford gained market share producing enormous profits primarily from the sale of light trucks and sport-utility vehicles. From 2000 to 2001, the Federal Reserve in a move to quell the stock market, made twelve successive interest rate increases. Following the September 11, 2001 attacks, a severe stock market decline caused a pension and benefit fund underfunding crisis. GM began its Keep America Rolling campaign, which boosted sales, and other auto makers were forced to follow suit. The U.S. automakers saw sales increase to leverage costs as gross margins deteriorated. Although retiree health care costs remain a significant issue, General Motors' investment strategy has generated a $17.1 billion surplus in 2007 in its $101 billion U.S pension fund portfolio, a $35 billion reversal from its $17.8 billion of underfunding.

In 2004, GM redirected resources from the development of new sedans to an accelerated refurbishment of their light trucks and SUVs for introduction as 2007 models in early 2006. Shortly after this decision, fuel prices increased by over 50% and this in turn affected both the trade-in value of used vehicles and the perceived desirability of new offerings in these market segments. The current marketing plan to extensively tout these revised vehicles as offering the best fuel economy in their class (of vehicle). GM claims its hybrid trucks will have gas-mileage improvements of 25%.

In the summer of 2005, GM announced that its corporate chrome emblem 'Mark of Excellence' will begin appearing on all recently introduced and all-new 2006 model vehicles produced and sold in North America. The move is seen as an attempt by GM to link its name and vehicle brands more closely.