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At the turn of the 20th century there were fewer than 8,000 automobiles in America, many of them powered by steam or electricity, others had gasoline engines. An unexpected turnout at the first New York Auto Show in 1900, showed the magnitude of the public’s fascination with the automobile. Over the next few years, hundreds of fledgling companies would try to meet the demands of a growing market. General Motors was founded by William “Billy” Durant on September 16, 1908. Durant had become a leading manufacturer of horse-drawn vehicles in Flint, MI before making his foray into the automobile industry. At its inception GM held only the Buick Motor Company, but in a matter of years would acquire more than 20 companies including Oldsmobile, Cadillac, and Oakland, today known as Pontiac. In Germany, a company named Opel began by manufacturing dependable sewing machines. Opel became a brand recognized worldwide after adding bicycles to their product arsenal. In 1899, Opel entered the growing automobile market with the Opel-Patent-Motorwagen System Lutzmann and became a part of General Motors thirty years later.
Earlier inventions such as the electric light bulb, the telephone, and the radio marked a new era of possibilities. In particular, the automobile sent the imagination racing and expanded the horizon upon which people could dream. As demand for automobiles grew to unexpected heights in the 1920s, General Motors set the pace of production, design, and marketing innovation for others to follow. Adding Chevrolet, Vauxhall and Opel, diversified the selection and added to the reach of GM. With the philosophy and strategy of “a car for every purse and purpose,” and a series of landmark innovations that changed the automobile itself, GM’s vehicles went beyond transportation, becoming statements and aspirations in their own right. During these years GM also opened more than a dozen new plants outside the United States. The milestone 1927 Cadillac LaSalle, with curves rather than sharp corners and a long, low stance, made people see cars as far more than just a mode of transport. Designed by Harley Earl, the LaSalle was a world apart from the high and boxy Ford Model T, marking the beginning of true automotive design.
Earl would head GM’s design studio until his retirement in 1959. Hard times in America and political change in Europe throughout the 30s brought new uncertainty, but GM’s commitment to innovation continued unabated. The return of peace following World War II brought a new optimism with consumers eager for goods that had been out of reach for so long. GM responded with an unprecedented string of milestone designs that continue to inspire to this day. In addition to innovations like independent front wheel suspension unibody construction, and the one-piece steel roof, General Motors pushed the envelope in design with a succession of vehicles including the 1949 Buick Roadmaster, the Chevrolet Corvette and BelAir, and the 1959 Cadillac El Dorado. These machines were as much fun to drive as they were to see drive by. During the war GM supplied the Allies with more goods than any other company.
How it works
In 1940, former GM President William Knudsen was chosen by President Roosevelt as Chairman of the new Wartime Office of Production Management. By 1942, one hundred percent of GM’s production was in support of the Allied war effort. GM delivered more than $12 billion worth of materials including airplanes, trucks and tanks. The 60s and 70s were a time of new challenges and great change. Environmental concerns, increased as prices and foreign competition led to an unprecedented downsizing of vehicles across all GM vehicle lines. It was the largest reengineering program ever undertaken in the industry, ushering in an age of lighter, aerodynamic and more fuel-efficient vehicles. In 1971, GM pioneered the use of engines that could run on low-lead or unleaded gasoline.
Two years later, General Motors was the first to offer an air bag in a production car. In 1974, GM introduced the most important step in reducing emissions with the catalytic converter. This technology, shared by General Motors, is still used by the entire auto industry. Germany and Japan, now recovered from the devastation of World War II, began exporting cars to the U.S. in larger numbers, and fuel price shocks sparked consumer interest in these new, more fuel-efficient vehicles. GM rushed to develop smaller vehicles as well, but the company had been too large and too successful for too long to change direction easily, and GM’s undisputed dominance of the U.S. market began to erode. Although General Motors was always active internationally, the 1980s and 1990s brought a new urgency for GM to operate as a single global company, to improve the efficiency of its operations and better compete with global competitors.
GM also began a series of reorganizations in North America that led to a single business unit there. In 1982, GM marked its largest single production expansion outside of North America with the opening of the new complex in Zaragoza, Spain. This facility immediately began building the fuel-efficient Opel Corsa. With joint ventures in China and India plus the additions of Saab and HUMMER to the GM family, the company expanded both the reach and variety of vehicles sold worldwide. 1995 was a big year for GM. Annual vehicle sales outside North America exceeded three million units for the first time. Five million vehicles were sold in the United States that year and GM entered into its first joint venture agreement in China. By the end of the 90s, the foundation for global growth in the new millennium had been set. During this period, GM also formed NUMMI, a joint-venture with Toyota, and Saturn, a wholly new company focused on creating a new small car and a new way of doing business. Lessons from these and other innovations were spread throughout GM.
By the start of the new millennium, GM had built a strong presence in emerging markets such as China and Brazil, and had largely completed its transformation into a single global company. The creation of GM Daewoo in 2002 gave GM a new organization specializing and engineering and manufacturing smaller cars, proving an important boost to Chevrolet’s growth as a global brand. The design and quality of GM’s new cars improved significantly, but GM found it difficult to regain share from its offshore competitors, and legacy cost from GM’s decades as a larger, less efficient company continued to weigh on financial results. It was also a period of tremendous innovation at GM. The company continued to push ahead with electric vehicle technology, developing a series of hydrogen powered fuel-cell concept and demonstration vehicles. Then, in January 2007, GM shook the industry with the Chevrolet Volt concept, a vehicle that could drive on battery power for daily commuting, then continue operating with a range extender when the battery charge was depleted.
The first production Volts were delivered to customers in December 2010. GM also became an industry leader in flex-fuel vehicles, which can run on either gasoline or E85, and developed a sophisticated two-mode hybrid system to significantly extend the economy of full-size trucks and SUVs. Notable new models included the Chevrolet Aveo small car, the Chevrolet Equinox crossover, and the Pontiac Solstice and Saturn Sky roadsters. The new Saturn Aura and Chevrolet Malibu put GM back into the thick of the midsize car fight, and the Cadillac CTS began a renaissance at Cadillac that is gaining momentum to this day. However, in 2008, a major recession and global credit crisis drove car sales to near depression levels and dried up private sources of capital. GM, critically short of operating cash, received a bridge loan from the U.S. Treasury, under the conditions that the company further accelerate a tough restructuring of its US operations that had been underway for several years.
General Motors Corporation filed for bankruptcy on June 1, 2009, and a new General Motors Company, which acquired many of the strongest assets of the old company, was created July 10, 2009, with the U.S. Treasury, Canadian governments, and the UAW Retiree Medical Benefit Trust as its major shareholders. This new GM is smaller, leaner company than its predecessor. It has four brands in the U.S.: Chevrolet, Buick, GMC, and Cadillac. It has a more focused network of 4,500 dealers and competitive labor agreements with its unions.
Globally, GM continues to grow rapidly, and more than 70 percent of its sales now come from outside the U.S. GM’s top five markets by sales are now China, the United States, Brazil, the United Kingdom, and Germany .Re-emerging at the new GM is the competitive spirit that, for decades, drove GM to leadership in styling, technology, engineering, marketing, and other key areas of the auto business. This spirit guides the new GM as it works to design, build, and sell the world’s best vehicles. Corporate Level Strategy
GM is focused on a single global vision: To design, build and sell the world’s best vehicles. This powers the development of world-class products that are winning in the marketplace, and is helping to transform their business and fortify their balance sheet. This business model also creates a self-sustaining cycle of reinvestment that drives continuous improvement in vehicle design, manufacturing discipline, brand strength, competitive pricing and margins. Here’s how they bring the insight, drive and vision of their business model to the market every day to yield positive results for our investors, employees and customers worldwide:
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