General Motors (GM)
General
Motors Company,commonly
referred to as General Motors (GM), is an
American multinational corporationheadquartered in Detroit that
designs, manufactures, markets, and distributes vehicles and vehicle parts, and
sells financial services, with global headquarters in Detroit's Renaissance
Center. It was originally founded by William C. Durant on September
16, 1908 as a holding company. The company is the largest American automobile
manufacturer, and one of the world's largest. As of 2018, General Motors
is ranked #10 on the Fortune 500 rankings of the largest United
States corporations by total revenue.
General
Motors manufactures vehicles in 37 countries; its core automobile brands
include Chevrolet, Buick, GMC, and Cadillac. It also owns
or holds controlling interest in foreign brands such as Holden, Wuling, Baojun,
and Jiefang.Annual worldwide sales volume reached a milestone of 10
million vehicles in 2016.
General
Motors Company
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GM
Renaissance Center in Detroit, Michigan
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Formerly
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General Motors
Corporation
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Type
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Public
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Industry
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Automotive
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Founded
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September 16,
1908; 110 years ago
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Founders
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William C. Durant
Charles Stewart Mott
Frederic L. Smith
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Headquarters
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Detroit, Michigan
,
U.S.
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Number of locations
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396 facilities on six
continents
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Area served
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Worldwide (except Hong
Kong, Macau, Cuba, Iran, North Korea, Somalia, Sudan, Syria and Afghanistan)
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Key people
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Mary T. Barra
(Chairman and CEO)
Mark Reuss
(President)
Dhivya Suryadevara
(CFO)
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Products
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Automobiles
Automobile parts
Commercial vehicles
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Production output
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9,600,000
vehicles (2017)
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Services
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Vehicle financing
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Revenue
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US$145.588
billion (2017)
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Operating income
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US$10.016
billion (2017)
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Net income
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US$ -3.864
billion (2017)
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Total assets
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US$212.482
billion (2017)
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Total equity
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US$ 35.001 billion (2017)
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Number of employees
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180,000 (December
2017)
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Divisions
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Buick
Cadillac
Chevrolet
GMC
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Website
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Business units
In addition to its twelve brands, General
Motors also holds a 20% stake in IMM, and a 77% stake in GM Korea. It
also has a number of joint-ventures, including Shanghai GM, SAIC-GM-Wuling and FAW-GM in
China, GM-AvtoVAZ in Russia, GM Uzbekistan, General Motors
India, General Motors Egypt, and Isuzu Truck South Africa. General
Motors employs 212,000 people and does business in more than 140 countries. General
Motors is divided into four business segments: GM North America (GMNA), GM
International Operations (GMIO), GM Cruze, and GM
Financial.
The company also operates a mobility division
called Maven, which operates car-sharing services in the United States,
and is studying alternatives to individual vehicle ownership.
GM Defense is General Motors' military
defense division, catering for the needs of the military for advanced
technology and propulsion systems for military vehicles.
General Motors led global vehicle sales for
77 consecutive years from 1931 through 2007, longer than any other automaker,
and in 2012 was among the world's largest automakers by vehicle unit sales.
General Motors acts in most countries outside
the U.S. via wholly owned subsidiaries, but operates in China through
10 joint ventures. GM's OnStar subsidiary provides vehicle
safety, security and information services.
In 2009, General Motors shed several brands,
closing Saturn, Pontiac, and Hummer, and emerged from a
government-backed Chapter 11 reorganization. In 2010, the reorganized GM
made an initial public offering that was one of the world's top five
largest IPOs to date, and returned to profitability later that year.
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History
General Motors Company was formed With an
Escrow account set up by R S McLaughlin for 15 years of Buick Motors in 1907 on
September 16, 1908, in Flint, Michigan, as a holding company controlled by William C. Durant, owner of Buick. At the beginning of the
20th century, there were fewer than 8,000 automobiles in the U.S., and Durant
had become a leading manufacturer of horse-drawn vehicles in Flint helped by
his purchase of the Carriage Gear patent from the McLaughlin family in Canada,
in the 1880s and 1890s, before making his foray into the automotive industry in
1904 by purchasing the fledgling Buick Motor Company. GM's co-founder
was Charles
Stewart Mott, whose carriage company was merged into
Buick prior to GM's creation in 1918. Over the years, Mott became the largest
single stockholder in The USA, and spent his life with his Mott Foundation, which has benefited the city of Flint, his adopted home. GM
acquired Oldsmobile later that year. In 1909, Durant brought in Cadillac, Elmore, Oakland, and several others. Also in 1909, GM acquired the Reliance
Motor Truck Company of Owosso, Michigan, and the Rapid
Motor Vehicle Company of Pontiac, Michigan, the
predecessors of GMC Truck. Durant, along with R. S. McLaughlin, lost control of GM in 1910 to a bankers who held the Escrow
account' trust, because of the large amount of debt taken on in its
acquisitions, coupled with a collapse in new vehicle sales.
The next year, Durant started the Chevrolet Motor Car Company in the U.S., and in Canada in 1915,
and through this, he and McLaughlin in Canada secretly purchased a controlling
interest in GM. Durant regained control of the company after one of the most
dramatic proxy
wars in U.S. business history. Durant then reorganized
General Motors Holding Company into General Motors Company in 1916, merging
Chevrolet with GM and allying General Motors of Canada Limited in 1918 after
McLaughlin Traded his Outstanding Stocks for GM stocks to allow the Corporation
in the USA . Shortly thereafter, he again lost control, this time for good,
after the new vehicle market collapsed. Alfred P. Sloan was
picked to take charge of the corporation, and led it to its post-war global
dominance when the seven manufacturing facilities operated by Chevrolet before
Chevrolet acquired the company began to contribute to GM operations. These
facilities were added to the individual factories that were exclusive to
Cadillac, Buick, Oldsmobile, Oakland, and other companies acquired by the
corporation. This unprecedented growth of GM would last into the early 1980s,
when it employed 349,000 workers and operated 150 assembly plants in the USA.
Chapter 11 bankruptcy
On
July 10, 2009, General Motors emerged from government backed Chapter 11 reorganization
after an initial filing on June 8, 2009. Through the Troubled Asset
Relief Program the US Treasury invested $49.5 billion in General Motors
and recovered $39 billion when it sold its shares on December 9, 2013 resulting
in a loss of $10.3 billion. The Treasury invested an additional $17.2 billion
into GM's former financing company, GMAC (now Ally). The shares in Ally were
sold on December 18, 2014 for $19.6 billion netting $2.4 billion. A study
by the Center for Automotive Research found that the GM bailout saved 1.2
million jobs and preserved $34.9 billion in tax revenue.
Also
in 2009 General Motors of Canada Limited was not part of the General Motors
Chapter 11 Bankruptcy, the company shed several brands, closing Saturn, Pontiac,
and Hummer, while selling Saab Automobile to Dutch
automaker Spyker, and
emerged from a government-backed Chapter 11 reorganization. In 2010, the
reorganized GM made an initial public offeringthat was one of the world's
top five largest IPOs to date, and returned to profitability later that year.
Corporate governance
Based
on global sales, General Motors is routinely among the world's largest
automakers. Headquartered at the Renaissance Center in Detroit,
GM employs approximately 180,000 people around the world. In 2009, General
Motors sold 6.5 million cars and trucks globally; in 2010, it sold 8.39
million.
As
of March 2017, Mary Barra is the chief executive officer (CEO)
and chairman of the board and Daniel Ammann is the president. The head of
design, Edward T. Welburn, was the first African American to lead a global
automotive design organization, and as of 2014 the highest ranking African
American in the US motor industry.
As
part of the company's advertising, Ed Whitacre announced the company's 60-day
money-back guarantee and repayment of a $6.7 billion loan from the
government ahead of schedule. On December 12, 2013, GM announced that Mary
Barra, 51, executive vice president, Global Product Development, Purchasing and
Supply Chain, was elected by the board of directors to become the next CEO of
the company succeeding Dan Akerson on January 15, 2014. Barra also joined the
GM board. From June 2009 to March 2011, the company had three chief
executive officers and three chief financial officers.
Financial results
The
company has reported annual profits since 2010. It can carry forward previous
losses to reduce tax liability on future earnings. It earned $4.7 billion
in 2010. The Wall Street Journal estimated the tax break,
including credits for costs related to pensions and other expenses, can be
worth as much as $45 billion over the next 20 years.
In
2010, General Motors ranked second on the list with 8.5 million units produced
globally. In 2011, GM returned to the first place with 9.025 million units
sold worldwide, corresponding to 11.9% market share of the global
motor vehicle industry. The top two markets in 2011 were China, with 2,547,203
units, and the United States, with 2,503,820 vehicles sold. The Chevrolet brand
was the main contributor to GM performance, with 4.76 million vehicles sold
around the world in 2011, a global sales record.
In
May 2013 during a commencement speech, CEO Dan Akerson suggested that GM was on
the cusp of rejoining the S&P 500 index. GM was removed from the
index as it approached bankruptcy in 2009.
On
April 24, 2014, CNNMoney reported that GM profits fell to $108
million for the first three months of 2014. GM now estimates the cost of
their 2014 recall due to faulty ignition switches, which have been
linked to at least 124 deaths, at $1.5 billion. Shares of GM were down 16%
for the year before the new announcement of GM's lower profits.
On
January 4, 2016, Fortune reported that GM led a $1 billion
equity financing in the transportation network company (TNC) Lyft.com. This
was GM's first investment in the ride-sharing ventures and its reported
participation ($500,000,000) in the round is considered to be indicative of its
efforts towards the future of transportation, which it believes will be
"connected, seamless and autonomous".
Board of Directors
· Mary
Barra, Chairman and CEO of General Motors
· Joseph
Ashton, former Vice President of the International Union at United
Automobile Workers
· Linda
Gooden, former Vice President of Information Systems and Global Solutions
at Lockheed Martin
· Joseph
Jimenez, CEO of Novartis
· Jane
Mendillo, former President and CEO at Harvard
Management Company
· Michael
Mullen, former Chairman of the Joint Chiefs of Staff
· James
Mulva, former CEO, President, and Chairman at ConocoPhillips
· Patricia
Russo, CEO of Hewlett Packard Enterprise
· Thomas
Schoewe, former CFO of Wal-Mart Stores
· Theodore
Solso, former CEO and Chairman of Cummins
· Carol
Stephenson, former dean at Ivey Business School
World presence
North America
General
Motors Canada Limited is the Canadian allied subsidiary of General Motors.
The employees are not all Canadian, as some salaried personnel are from the
U.S. and work for the company. GM products focus primarily on its four core
divisions — Chevrolet, Cadillac, As the Corporation has shuttered plants
Buick, and GMC. The GM restructuring has resulted in a lower break-even point
for annual sales and renewed profits because of the loss of millions of jobs.
In
mid-2005, GM announced that its corporate chrome power emblem "Mark of
Excellence" would begin appearing on all recently introduced and all-new
2006 model vehicles produced and sold in North America. However, in 2009 the
"New GM" reversed this, saying that emphasis on its four core
divisions would downplay the GM logo.
In
May 2012, GM recorded an 18.4% market share in the U.S. with stock
imported
In
November 2018, GM announced it will lay off more than 14,000 employees in North
America, comprising 15% of its workforce and 25% of its executive staff in the
region. The company plans to cease production in three assembly (Lordstown
Assembly in Ohio, Detroit-Hamtramck Assembly in Michigan and Oshawa The first
GM Corporation in North America 1918 in Canada) and two engine/transmission
(White Marsh, Maryland, and Warren, Michigan) plants during 2019. Employees
from those plants would also be made redundant.
South America
In
2008 the third largest individual country by sales was Brazil with
some 550,000 GM vehicles sold. In that year the other South American countries
Argentina, Colombia, and Venezuela sold another 300,000 GM vehicles, suggesting
that the total GM sales in South America (including sales in other South
American countries such as Chile, Peru, Ecuador, Bolivia, etc.) in that year
were at a similar level to sales in China.
On
April 20, 2017, General Motors announced that the Venezuelan government had
seized the General Motors Venezolana plant in Valencia.
Europe
Prior
to their sale to Groupe PSA in 2017, Opel was the main GM
brand name in Europe except in the United Kingdom, where Opel's British
subsidiary, Vauxhall, used its own "Vauxhall" brand name.
The Chevrolet brand
was reintroduced in Europe in 2005, selling mostly rebranded Daewoo cars
acquired by GM Korea. After having lost approximately $18B over 12 years,
GM began phasing out mainstream sales of Chevrolet in Europe in late 2013, and
finished by late 2015, to focus on Opel/Vauxhall.[74][75] Chevrolets continue to be sold in Russia and
the Commonwealth of Independent States, through the GM Uzbekistan joint
venture. Chevrolet still has a limited presence in Europe through imports of
the Corvette and Camaro, while Cadillac maintains a limited
presence as well.
In
2012, PSA Peugeot Citroen and General Motors formed an alliance,
which involved General Motors acquiring seven percent of the PSA Group. The
ownership was soon divested on December 13, 2013, generating "gross
proceeds of €0.25 billion." By 2017, Groupe PSA considered taking
over Opel from GM, after GM reported a loss of $257 million from its European
operations on 2016, the sixteenth consecutive loss-making year for GM in
Europe, bringing its amount losses in Europe since 2000 to more than US$15
billion. On March 6, 2017 the sale of Opel and Vauxhall to the PSA Group
for $2.3 billion was confirmed.
GM Global Sales: January - December 2017
Asia
The
company manufactures most of its China market vehicles locally. Shanghai
GM, a joint venture with the Chinese company SAIC Motor, was created With
Canadian Regal in 1990 on March 25, 1997. The Shanghai GM plant was officially
opened on December 15, 1998, when the first Chinese-built Buick came off the
assembly line. The SAIC-GM-Wuling Automobile joint-venture is also
successfully selling microvans under the Wuling brand (34 percent
owned by GM). Much of General Motors' recent growth has been in the People's
Republic of China, where its sales rose 66.9 percent in 2009, selling 1,830,000
vehicles and accounting for 13.4 percent of the market.
Buick is
strong in China from early Introduction by the Canadian Buick sold to the last
Emperor of China, later being led by the Buick Regal 1990 subcompact.
The last emperor of China owned a Buick. The Cadillac brand
was introduced in China in 2004, starting with exports to China. GM pushed the
marketing of the Chevrolet brand in China in 2005 as well,
transferring Buick Sail to that brand.
In
August 2009 the joint venture of FAW GM Light Duty Commercial Vehicle Co Ltd
was formed that mainly produces Jiefang light-duty trucks.
General
Motors vehicle sales in China rose 28.8 percent to a record 2,351,610 units in
2010. GM set up an auto research center as part of a US250 million
corporate campus in Shanghai to develop 'gasoline-hybrid cars, electric
vehicles and alternative fuels, engines and new technologies'. The
company plans to double its sales from 2010 to about 5 million units in China
by 2015.
SAIC-GM-Wuling established
the low-cost Baojun brand to better compete with domestic
rivals, Chery, Geely and BYD for first-time buyers of
cars priced around USD10,000. It is estimated that such market in China is
about 5 million vehicles a year, larger than the auto market in France and
Britain combined. However, some are worried that 'local brands like Baojun could
eventually become threats to their parent brands if they compete more against
established models over time'. Shanghai-GM-Wuling sold 1.23 million vehicles in
2010, mainly commercial vans and trucks, of which about 700,000 units were a
van called Sunshine.
GM
maintains a dealership presence in Japan, called GM Chevrolet Shop,
previously known as GM Auto World Shop. Current GM Japan
dealerships were either former Saturn dealerships or Isuzu dealership
locations. GM products are also currently sold by the company Yanase Co.,
Ltd. since 1915.
In
August 2011, GM announced plans to reactivate its plant that previously produced
rebadged Chevrolet Blazer as Opel as well as Brazilian Blazer, and also build a
new plant in Bekasi, West Java, Indonesia, which would produce 40,000
passenger cars per year for the Southeast Asian market. It is the
third plant in Southeast Asia, after the Rayong plant, Thailand,
and the Hanoi plant, Vietnam.
In
October 2011, the South Korea Free Trade Agreement opened up the South Korean
auto market to American made cars. GM owns (per December 31, 2011) 77.0%
of its joint venture in South Korea, GM Korea.
On
March 11, 2013, GM opened a new 190,300 square-foot manufacturing plant in
Bekasi, Indonesia. In February 2015, GM announced they will close the
Bekasi plant by the end of June and stop production of the Sonic in Thailand by
mid-year.
GM
announced on May 18, 2017 that it would exit the Indian market, which it had
entered for the second time in 1996. The first time was in 1928, when it became
the first car maker to manufacture cars in India. GM would however continue to
manufacture cars from its Talegaon, Maharashtra plant for the
export market. This plant has a capacity of 1,60,000 units annually. The older
Halol, Gujarat plant with a capacity for 50,000 units stopped production on
April 28, 2017. It will be sold, with GM in talks with China's SAIC Motor
Corporation Ltd. The India arm's domestic sales for April 2016 – March 2017
declined to 25,823 units from 32,540 the previous year and market share
contracted from 1.17 percent to 0.85 percent for the same period. However,
exports surged 89 percent during the same period to 70,969 units. GMTC-I, GM's
technical center in Bengaluru, India will continue doing its global work. About
400 employees, 8 percent of GM's total Indian work-force, would be affected by
the pull-out. Weak product line-up and below par service quality were the
reasons for the poor showing by GM in India. It will also affect 10,000
employees working with about 120 Outlets/Dealership of GM in India.
In
February 2018, comments by CEO Mary Barra that GM's Korean operations' cost
structures had "become challenging" fuelled speculation that the
company might divest GM Korea, followed by a market exit.GM is currently
negotiating a $2.8 billion investment plan for its Korean operations from the
South Korean government, to be dispersed over the next decade. Furthermore, the
company approached the Korea Development Bank to participate in a $2.7 billion
debt swap issued by its Korean subsidiary.
According
to the South Korean unit of General Motors, its domestic sales for March
dropped by 58 percent, which is more than half compared to the past year. In
February 2018, General Motors had said to shut down one factory and then decide
what lies ahead for the remaining three plants in South Korea during rising
losses there. In recent years, the US automaker pulled its Chevy brand from
Europe which wedged GM Korea's exports since it was a major market for the
Korean firm.
Africa
GM
has a long history in Egypt which began in the 1920s with the
assembly of cars and light pickup trucks for the local market. In the mid of
the 1950s, GM withdrew from the Egyptian market. Some years later, the Ghabbour
Brothers began to assemble Cadillac, Chevrolet and Buick models
up to the 1990s. Since 1983 GM and Al-Monsour Automotive Company have
owned General Motors Egypt, which is currently the only manufacturer of
traditional GM branded vehicles in Egypt.
In
the 1920s Miller Brothers Nigeria was founded as an importer
of commercial vehicles of the Bedford brand into the country. In 1949, the
company opened its own assembly plant and operated under the name Niger/Nigeria Motors.
In 1965 the plant and its distribution network was split into different
companies and renamed as Federated Motors Industries. In 1991 the company was
taken in by a joint venture between General Motors and UACN
of Nigeria.
Another
manufacturing base of the GM for the African markets is the Industries Mécaniques
Maghrébinesheadquartered in Kairouan, Tunisia, which assembles Isuzu
and Mazda models for the Maghreb region.
Formed
in 1975, General Motors East Africa (GMEA) was the largest assembler of
commercial vehicles in the region exporting them from Kenya to East and Central
African countries including Uganda, Tanzania, Malawi, Rwanda
and Burundi. Its facility located in Nairobi assembled a wide
range of Isuzu trucks and buses including the popular Isuzu N-Series versatile
light commercial vehicle, TF Series pick-ups and Isuzu bus chassis. In addition
to assembly, GMEA also marketed the Chevrolet products Spark and
Optra. Selling entire GM's 57.7 per cent stake in General Motors East Africa to
Isuzu was announced on February 28, 2017. After finishing the sale, GMEA
was renamed to Isuzu East Africa Limited, effective from August 1, 2017.
General
Motors began operating in South Africa in 1913 through its wholly owned
subsidiary, General Motors South Africa. Following the passage of
the Comprehensive Anti-Apartheid Act in 1986, GM was forced to divest
from South Africa, and GMSA became the independent Delta Motor Corporation. GM
purchased a 49% stake in Delta in 1997 following the end of apartheid, and
acquired the remaining 51% in 2004, reverting the company to its original name.
By 2014 it was targeting the production of 50,000 cars a year but was being
hampered by national labour unrest, strikes and protests. In May 2017, GM
announced that it would exit the South Africa market by the end of 2017 by
selling part of the business to Isuzu and look for a buyer for the rest of the
business.
Oceania
In
New Zealand, GM was represented by locally assembled Chevrolet, Pontiac and
Vauxhall cars from 1926. In 1954 sales of fully imported Holden vehicles
began. New Zealand assembly of Holdens began in 1957 and through the early
1960s, Holdens replaced all Chevrolets and most Vauxhalls. Tariffs on
Australian-made cars were eventually removed and local assembly plants closed
by 1991. GM New Zealand was renamed Holden in 1994.
In Australia,
GM has been represented by the Holden brand since 1948. Chevrolets and Pontiacs
were also manufactured in Australia until 1968. In 2012, GM established Opel as
a niche marque in Australia and began to sell Opel cars in Australia. However,
less than twelve months later, Opel sales ceased.
On
December 10, 2013, GM announced that Holden would cease manufacturing
operations in Australia by the end of 2017. Holden's Australian presence
now only consists of a national sales company, a parts distribution centre and
a global design studio.
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