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General Motors turnaround strategy

  • 29/Oct/2024

General Motors, one of the world's largest car manufacturers, filed for Chapter 11 bankruptcy in 2009, facing severe financial difficulties and declining sales. The turnaround management team implemented a comprehensive restructuring plan that involved closing underperforming brands, reducing excess capacity, renegotiating labour contracts, and obtaining government assistance.

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  1. Cost-optimisation measures: The Company renegotiated labour contracts with the United Auto Workers union, resulting in reduced labour costs and improved productivity. They also closed several manufacturing plants and consolidated operations to eliminate excess capacity.

    • Focus on core brands: The Company identified core brands, such as Chevrolet and Cadillac, and divested non-core brands, including Pontiac and Hummer, to streamline operations and reduce costs.
    • Government assistance: GM obtained significant government assistance in the form of loans and equity investments, enabling the company to continue its operations during the bankruptcy process and implement the proposed turnaround initiatives.

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