Mary T. Barra, the CEO of GM, took the industry by surprise with the announcement that her

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Mary T. Barra, the CEO of GM, took the industry by surprise with the announcement that her firm would phase out petroleum-powered automobiles and trucks and sell only vehicles that have zero tailpipe emissions by 20351 Industry analysts had expected that Barra, who had worked for GM her entire career, would let the firm relapse into the arrogance, complacency, and denial that had plunged it into bankruptcy in 2009. Instead, Barra has been planning to move GM away from relying on the kinds of vehicles it had sold to generations of consumers. With this change, GM will hope to drive growth in new areas after repeated plateaued sales in recent periods.

Barra has been preparing GM to be a formidable player in the future. She has pushed the firm to be more involved with new developments, such as electric vehicles, ride-sharing, and driverless cars. When the firm launched its first hybrid car, the Volt. in 2010, it was significantly lagging behind competitors in investing in emerging technologies. Nevertheless, Barra claimed it Was an important first step in acknowledging where GM needed to go.

Since then, GM has launched the new all-electric Bolt, which promises an almost 240-mile range between charges for a price of Page C115 $30,000 after federal tax credits. It has moved quickly to beat Tesla's new budget-priced Mode! 3 to market. In January 2016, GM announced a $500 million investment in Lyft. the country's second-largest ride-share service. It subsequently worked with Lyft to develop a program that allows Lyft drivers in seven big cities to rent GM cars at a discount. A few months later, the firm spent $1 billion acquiring Cruise Automation, which has built a complex array of software and hardware that uses artificial intelligence that can lead to driverless cars.

In order to shift its resources to fund these new initiatives, GM announced in November 2018 that it was halting operations at four plants in the United States and one in Canada, resulting in the loss of 6,000 factory jobs. All of these have been losing money because they have been producing small- and medium-sized cars such as the Chevrolet Cruze and Impala and the Buick LaCrosse. The firm also plans to trim its salaried staff by 8,000, representing over a third of its white-collar employees.

By making all of these moves, GM is, in fact, constructing a portfolio of assets that are dedicated to disrupting its own core business from within. Even as it lays off its older workforce, it has been recruiting younger employees with technology-heavy skills that go beyond traditional vehicle design and engineering. "The auto industry is on the cusp of change, and GM has to prove that a longtime established player is up to the task," said Michelle Krebs, a senior analyst for the car shopping site Autotrader.

Moving through Bankruptcy

GM has witnessed a long decline from its dominant position in the 1950s, when it held almost 50 percent of the U.S. market for automobiles. A succession of CEOs over the years failed to halt its decline in spite of their resolve to turn things around. When Richard Wagoner took over in 2000. he carried out three major restructurings, eliminating dozens of plants and tens of thousands of jobs. and jettisoning hundreds of dealers. In spite of these efforts. GM announced a loss of $30.9 billion for 2008, amounting to a staggering $50 a share. The firm had not managed to post a profit since 2004. running up cumulative losses of over $82 billion between 2005 and 2009. Wagoner eventually began to run short of funds and turned to the U_S. government for loans in order to survive, but the Obama administration demanded his resignation for its support.

Wagoner was replaced on an interim basis by Frederick A. Henderson, who had been president and chief operating officer of the firm since 2008. Under Henderson. the firm was asked to negotiate with bondholders and the union for further concessions in order to reduce its bloated cost structure. Unable to reach any agreement, the firm announced in late July 2009 that it had to seek Chapter 11 bankruptcy protection. Under the terms of the bankruptcy protection, GM was able to wipe out a big chunk of its debt, reducing this from over $46 billion before the filing to around $17 billion afterwards, saving about $1 billion a year in interest payments. The U.S. government agreed to invest another $30 billion into the firm, in addition to the $20 billion it had already contributed, in exchange for 61 percent of stock in the new GM.

Shortly after the bankruptcy filing, changes were made to the board of directors and there was a shake-up of the ranks of GM's senior management. The new board was determined to address problems that had been laid bare by the task force that the government had assigned to investigate GM in early 2009. They had been particularly astonished by the emphasis on past glories and the commitment to the status quo they had found to be quite widespread among the firm's management ranks. "Those values were driven from the top on down," said Rob Kleinbaum, a former GM executive and consultant. "And anybody inside who protested that attitude was buried."

Over the following year, GM was led by two different board members. Edward E. Whitacre. Jr., ran the firm for about a year before being replaced by Dan Ackerson. Ackerson had been appointed by the U.S. government as a board member during GM's bankruptcy. A no-nonsense former navy officer, Ackerson began to address the various problems that continued to plague the firm. There was a strong consensus among the executives that the company was beginning to change its approach to its business. Shortly after he took over, Ackerson wrote in an internal memo: "Our results show that we are changing the company. so we never go down that path again."

In January 2014, GM was finally able to move past the bankruptcy as the government-appointed Ackerson was replaced by Barra, who had worked her way up within the firm and has become the first woman ever to run a big automobile company. She has been a rank-and-file engineer, a plant manager, the head of corporate human resources, and most recently, the senior executive overseeing all of GM's global product development. Barra's appointment came on the heels of the sale of the last shares that the U.S. government had held of the firm, finally making it free of its bankruptcy obligations. "This is truly the next chapter in GM's recovery and turnaround history," Barra told employees upon her appointment. "And I am proud to be a part of it?

Responding to Safety Concerns

Even as Barra was working on making GM more effective. GM executives decided that a recall of the 619,000 Chevrolet Cobalts and Pontiac G5s was necessary. Questions were raised about the delay of several years in recalling these vehicles in spite of knowledge of a faulty ignition switch that would cause these cars to shut off and disable its airbags. In 2004. engineers had suggested a fix, but executives decided against it because of potential delays and cost overruns in production. GM finally decided to move after the reports of accidents that had led to deaths and injuries could no longer be ignored. This was particularly embarrassing for the firm as GM had developed the Cobalt to show that it was no longer cutting corners and was capable of making competitive small cars.

In testimonies before a House Committee on Energy and Commerce subcommittee, Barra acknowledged that the safety problems had resulted from deep underlying problems with the GM culture. A report was released in June by Anton R. Valukas, a former U.S. attorney whom the firm hired to conduct a three-month investigation of the decision to ignore the problems with the ignition switch. Its findings indicated that company practice was that all issues that arose were typically passed through a number of committees without ever being resolved. Furthermore, no minutes were taken of any of the meetings to indicate who was responsible or accountable for any decisions that were taken.

Valukas concluded that shifting responsibility for problems to others was deep in the firm's DNA. He referred to a GM salute that involved a crossing of arms and pointing outwards toward others, indicating that the responsibility belonged to someone else. In particular, Valukus found that employees at GM were given formal training about how to avoid accountability in documenting any safety issues. They were told to avoid using words such as problem or defect and to replace them with softer words such as safety or condition.

"The story of the Cobalt ts one of a series of individual and organizational failures that led to devasting consequences," Valukas stated to a committee hearing ® Under Barra, GM executives did move quickly to respond to the safety problems. The firm ordered the dismissal of 15 employees, including a vice president for regulatory affairs and several corporate lawyers, and disciplined others. It appointed a new global head of vehicle safety and named a new vice president in charge of global product integrity. GM also decided to more than double to 55 a team of safety investigators that would work within engineering. Finally, it also hired a compensation expert to examine claims and make cash settlements for those who either died or were injured as a result of accidents caused by the defective ignition switch. "We are a good company." Barra insisted. "But we can and must be much better"?

Focusing on Fewer Brands

One of the issues that GM had wrestled with for years was the number of brands of vehicles that it offered. For years, the firm had built its dominance by offering cars designed for different customers by separate divisions. Each of these divisions came to represent a distinct nameplate or brand. Its extensive brand lineup had long been GM's primary weapon in beating back both domestic and foreign rivals. However, as the firm's market share began to decline, designing and market cars under several brands became difficult. To cut costs, GM began to share designs and parts across divisions, leading to some loss of distinctiveness between the different brands.

Analysts had been questioning for many years GM's decision to stick with as many as eight U.S. brands, with the final addition of Hummer. The decision to carry so many brands had placed considerable strain on GM's efforts to revamp Its product line on a regular basis. However, when it was forced to turn to the US, the firm finally agreed to cut out four of its brands: Pontiac, Saturn, Saab, and Hummer. government for funding to stay afloat. A. An analyst, Andrew Shapiro believed that GM should have started thinking seriously about cutting back on its car divisions during the 1980s. "There are always short-term reasons for not doing something," explained Shapiro.

Since it has cut down on its brands, GM has been working on revamping its remaining line-up of cars. The firm has successfully reinvented Chevrolet as a global mass-market brand, with over 60 percent of its sales now coming from outside the United States. Recent sales have been driven by the new pickup trucks and sport-utility vehicles such as the revamped heavy-duty Silverado capable of towing 35.000 pounds with a diesel engine. But GM is also expecting to be successful with its new Bolt all-electric subcompact car, which can run for almost 230 miles on a single charge. An executive explained the motivation behind pushing to develop cars that move away from a reliance on fuel: "We wanted to prove we could do it?

GM has also been focusing on strengthening its more upscale brands such as Buick and Cadillac. Buick, the oldest active automobile brand in the United States, has been catering to a shrinking population of people over 65. Over the last couple of years, the firm worked on updating the brand by sticking to its image of "refined luxury" but moving away from being regarded as a living room on wheels. New models of the Enclave, Encore, and Envision have been designed to attract younger, performance-oriented customers. In spite of these efforts, China alone has accounted for as much as 80 percent of its sales. Buick is no longer offered in most other markets other than the United States, Canada, and Mexico. Finally. GM continues to struggle with its Cadillac luxury brand, which has had difficulty in competing with European automakers. It has slipped in quality, ranking 27th out of 31 brands in the J.D. Power 2018 U.S. Vehicle Dependability Study. The firm abruptly replaced four-year Cadillac chief Johan de Nysschen who led a $12 billion overhaul designed to make the brand more competitive. Steve Carlisle, who has taken over, realizes the challenges he faces in reviving the brand's fortunes. He has focused on improving its quality, boosting its marketing, and better defining its identity. Cadillac has done better with its strong selling XT5, a midsized SUV, and hopes to do well with its newer XT4 compact SUV. "There's no excuse to not be at the top of the pack in vehicle quality these days," said Maryann Keller of auto industry analyst firm Maryann Keller & Associates.

Preparing for the Future

Even as GM Is relying on pickup trucks and sport-utility vehicles to make profits in the short run, it is banking on electric vehicles and self-driving cars for its future. In November 2018, Dan Ammann gave up his job as president of GM to become chief executive of Cruise, the division working on autonomous vehicles. The unit was formed when Ammann spearheaded GM's acquisition of Cruise Automation, a San Francisco startup, for more than $1 billion in 2016.

The appointment of Ammann has provided more management heft as GM prepares to launch a driverless-ride service before the end of 2019. "This is a technology that we wanted to develop and deploy on a massive scale," he stated about the commitment to self-driving vehicles in a recent interview! In particular, GM is focused on a new technology known as lidar, which uses near-infrared light to detect the shape of objects around it. It has been making investments in advancements to lidar, which will reduce the costs of making cars and enable them to travel more safely at higher speeds.

In order to prepare for its launch, Cruise is already testing about 180 self-driving cars in San Francisco. Its vehicle, the Cruise AV. is a small electric car that has no steering wheel or pedals. It navigates streets using radar, cameras, and other sensors that allow the car's computer systems to identify pedestrians, intersections, other vehicles, and obstacles. With no steering wheel, it has two passenger seats in the front, a center console with a display screen, and buttons and knobs for audio and climate control.

With Cruise, GM may be the first to rush into the field, but it faces plenty of competition from Ford, Uber, Lyft. and Waymo. However, Barra is confident that GM is well-positioned to achieve success. "I do believe General Motors is a tech company," she recently stated. "We put these products on the road that integrate 30,000 parts and already have hundreds of millions of lines of code in them." In fact, Cruise is well on its way to developing a potentially significant market value. GM has partnered with SoftBank, the Japanese technology giant, and Honda Motor, the Japanese auto firm.

Firing on All Cylinders?

Barra feels confident that the investments GM has been making will yield results in the future. Although the firm is relying heavily on profits from its trucks and SUVs, it is banking on its new initiatives. Not only is the Bolt the first inexpensive long-range electric car on the road, but it is also expected to function as the firm's platform for testing new models for ride-sharing and autonomous driving. Soon after GM made an investment in Lyft, it also announced that it would launch a proprietary car-sharing service called Maven. A Zipcar-like offering, Maven taps into another possible future of mobility: replacing ownership with sharing. This startup is within GM. which has features that are not available on Zipcar, lays the groundwork for a possible future when GM owns and operates a fleet of its own autonomous cars that could also be tapped for ride-sharing.

GM realizes that it faces considerable competition in this new arena from other car and technology firms. However, product chief Mark Reuss believes that the firm has an advantage because, with its acquisition of Cruise, it is well-positioned to integrate self-driving technology into its own cars, over the last couple of years. GM has already begun incorporating aspects of self-driving technology into a few of its models, including software that alerts drivers if they veer out of their lane or stops the car if it detects an imminent collision. Talking about the challenges of using this technology in cars, Reuss said: "The piece that is not well understood outside of the automotive industry is how hard it is to integrate technology into a car. It seems like you should be able to laver it in and have it work, and that would be great."

Despite the push into new technologies, sales for the Bolt have so far failed to exceed a few thousand cars a month, hardly enough to make a profit. Similarly, the profit potential is even less certain with GM's investments in self-driving technologies. It has been pouring billions into Cruise, its autonomous driving unit, but even if its efforts are successful, it could be years before the firm can earn back its investments. Nevertheless. in the words of Bill Rock, a 22-year veteran working on developing autonomous vehicles: "We're on the cutting edge here. It's a very complicated process. but it's the direction the company needs to go."

Analyze the company's general and industry environment, internal resources and intellectual assets.

External analysis: analyze General Motors' competitive environment using either the environmental scan/PESTLE analysis or Porter's Five Porters. A SWOT analysis is optional.

Internal analysis: analyze General Motor's internal environment using either the Value Chain Analysis (include commentary on both primary and support activities) or Resource-based View of the Firm (include a discussion of tangible and intangible resources, organizational capabilities, and sustainable competitive advantage using VRIO). Also comment on General Motors' human and social capital plus their intellectual assets.

Using financial ratio analysis techniques, analyze General Motors' financial standing for 2020. Calculate and analyze at two ratios in each of the following categories: short-term solvency or liquidity, long-term solvency or financial leverage, asset utilization or turnover, profitability, and market value.

Barra, who had worked for GM her entire career, would let the firm relapse into the arrogance, complacency, North America United States Other Total North America. Asia/Pacific, Middle East and Africal China(a) Other