GM's Second Life
On June 1, 2009, General Motors, once the largest and among the mightiest corporations on the planet, filed for bankruptcy. It emerged on July 10, 2009 as a smaller and less debt burdened company but with majority U.S. taxpayer ownership. Edmunds' AutoObserver.com presents a special series that examines the first year of GM's second life post bankruptcy and looks at the road ahead.
A year after General Motors filed for Chapter 11 bankruptcy, the hot topic is no longer whether GM deserved to be bailed out by the government, but how much the "new" GM might be worth on Wall Street -- and whether taxpayers, who own 60 percent of the automaker, stand a chance at getting their money back from the federal bailout.
After its brush with death, GM executives are eager to issue an initial public offering and return to being a publicly traded company. GM CEO Ed Whitacre repeatedly speaks of an IPO taking place as early as later this year or early 2011...
A "new" General Motors lives, when many doubted it would; and it is healthier than the old GM. The automaker ditched costs and is making better products. But bankruptcy didn't fix everything. The future calls for the automaker to return to public ownership, repay taxpayers, fund union health care and earn profits. None are easy tasks.
With all the positive things that have begun accruing to General Motors as it attempts to leave 2009's bankruptcy behind, the biggest one of all has only begun to materialize: GM's fast-improving manufacturing-cost position versus its biggest foreign rivals.
Costs will be much discussed at its first annual Global Business Conference June 29. GM announced Thursday that the conference will be hosted by GM Vice Chairman and CFO Chris Liddell and several senior leaders to provide updates on the company's global business. The conference clearly is a warm-up for GM's upcoming initial public offering ofits stock..
Fewer brands means fewer plants. Assembly plants, powertrain plants, component-making operations. When GM filed for bankruptcy last June, it said it would idle or permanently close 14 manufacturing plants and three service and parts operations.
Pulitzer Prize-winning writer Paul Ingrassia, author of "Crash Course" that chronicles General Motors' and Chrysler's travails, insists government-funded bankruptcy was absolutely necessary, but he questions whether taxpayers will be repaid and if GM will forge a secure, prosperous future.
With the impending bankruptcy of General Motors, many saw the silver lining - the potential for some great deals. But the bargains didn't appear, at least not right away.
The former AT&T CEO already has made a big impact on how his new company operates. Whitacre has shaken up the ranks of top management more than once. He has streamlined decision-making with a few bold strokes. He has set high goals and has frowned on excuse-making. And when it comes to GM's crucial product-development and manufacturing operations, Whitacre has left well enough basically alone.
What else has he done?
In about a year's time, during which General Motors entered and emerged from bankruptcy, the automaker has been a revolving door of management. During that period, GM had three different Chief Executive Officers and three different Chief Marketing Officers along with a host of other management changes. Here's a slideshow of some of the more high-profile changes.
Great products underlie the most effective promotion, and in that regard General Motors is on a promising path with its new vehicles. But GM hasn't done itself any favors with its marketing for a long time.