Having made the decision of how to treat the two companies in relationship to each other, a question is now being posed relative to what the Detroit headquarters should decide in terms of the future of Opel and Vauxhall as integrant parties of General Motors. On the one hand, the parent organization considered selling the two subsidiaries and as such renouncing most of its operations within the European arena; on the other hand, they considered not selling the subsidiaries, but continuing to invest in them and maintaining them as integrant parties of GM. The following lines detail the two alternatives.
4.1. Selling Opel and Vauxhall
The alternative of selling Opel and Vauxhall was made in early 2009, as the financial crisis was beginning to take a toll on General Motors. Internal analyses pointed out to the fact that Opel was a far too large organization, employing over 55,000, and expanding over too much factory space. Despite these features, it contributed only limitedly to the Group's annual revenues.
After months of discussions, the board at GM decided to sell the British and German subsidiaries to Magna, a Canadian manufacturer of car parts. The loan would be offered by a Russian bank, Sberbank, making as such the Canadian-Russian consortium the majority owner of Opel and Vauxhall. They would possess 55% of the interest; 35% would remain with General Motors and 10% would go to the staff members. The proposition to sell the two subsidiaries to Magna was well received by German chancellor Angela Merkel, who praised the initiative for its ability to save jobs; Magna promised that it would not close any Opel organization on German territory (Wilx, 2009).
4.2. Keeping Opel and Vauxhall
It took half of a year for General Motors to make the decision to sell Opel and Vauxhall; yet, before a materialization of this decision could be observable, the board focused more intensely on their second alternative -- that of keeping the German and British subsidiaries. Such a course of action would undoubtedly increase the pressure for the American owner, which would not manage to reduce the threat of the crisis. Additionally, they would be forced to invest their own resources to revive the company and it would as such be uncertain if the company would be profitable by 2010, as estimated by Magna's takeover (Stoll, Fuhrmas and Walker, 2009). It would also have a negative impact onto Germany, as the measure would require Opel to reduce 30% of its costs, meaning that it would have to let go an estimated 10,000 employees (Yahoo News, 2009).
Despite these threats and limitations, the company would be able to retain its strong reputation, and even enhance it by proving its abilities in times of financial hardship. It could also strive and convince the German and British governments to offer it subsidies and bridge loans in order to move passed the crisis. And when Opel and Vauxhall regain their pre-crisis strength, GM will be the sole beneficiary and the sole controller. Given this situation, it is most advisable for General Motors to not take the easy way out through selling the two subsidiaries, but to keep them and strive to revive them.
On the 4th of November 2009, less than two months after the deal with Magna had been declared, the General Motors officials announced that the agreement was off and that they would not sell the two German and British subsidiaries. This recent decision was based on improving business conditions for the organization, but also the hope that the German and British governments and communities would support the company (Wards Auto, 2009).
5. Stakeholder Strategies
Due to the difficulty in making the final decision, as well as the large number and complexity of the parameters involved, it is possible for the board at General Motors to once again change their ruling. This possibility arises as the organizational leader focus on ultimate goals and benefits, as promoted by the principles of strategic management. Whichever the ultimate course of action however, fact remains that various categories of stakeholders would be impacted by the future endeavors, and that the organization would have to implement various strategies.
Considering that General Motors sticks to the decision of not selling Opel...
" Conclusion Overall GM is currently confronting some of the most difficult obstacles that it has ever had to overcome. Government intervention is no guarantee that the company will be able to overcome these obstacles. Billions of dollars have been given to the company in an effort to save it from further demise. However, capital alone will not save the company, there must be a strategic effort of the management to properly
GM's market share is a source of strength because it provides the company with considerable muscle and brand recognition. That is leads the Chinese market and is a major player in the U.S. market provides it with opportunities for economies of scale, and to introduce new products. The company's size gives is considerable bargaining power with suppliers. This in turn allows it some degree of cost control, especially now that
Still, the future stated goal of GM is to develop an electric or hybrid version in all of its existing brands lines -- Chevrolet, Cadillac, Buick and GMC. Outcome of changes GM's most notable success has been overseas, where it is currently ahead of all of its competitors in the rapidly expanding Chinese market. "While GM is outpacing Ford in overseas competition, GM cannot solely depend on China for growth. While
Three of the most important ones are succinctly revealed below: (a) The declining demand for the company's vehicles -- this issue led to the necessity for more financial resources, which eventually materialized in the acceptance of aid under TARP (b) The growing competition placed by international manufacturers -- this situation raised an impending necessity to reorganize the company in a means that it better addresses the needs and wants of customers (c)
Marketing Plan for Toyota Toyota Motor Corporation is a public Japanese automotive manufacturer located in Toyota, Aichi, Japan. The company was founded in 1937 by Kiichiro Toyoda as a division of his father's Toyota Industries company (Chart, Ends, & Shares, 2000). While still a department of Toyota Industries, the company created its first product, which was a type A engine and passenger car dubbed Toyota AA. Toyota Motor Corporation produces automobiles
Strategic Plan for General Motors Upper Mid Sedan Vehicle Segment Mission Statement To maintain and consolidate the status of the company as the number one auto manufacturer in the U.S. By employing the core values of continuous improvement, innovation and integrity and teamwork. To foster consumer enthusiasm and also enhance the team by giving them individual respect and responsibility. External Environment Remote Environment Economic: Currently the U.S. economy is experiencing a slowdown. The buying power
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now