General Motors

General Motors = Corporation,=20 also known as GM, is the w= orld's=20 largest automaker. Founded in 1908, GM today employs = about=20 326,999 people around the world. With global headquarters in = Detroit, GM=20 manufactures its cars and trucks in 33 countries. In 2005, = 9.17=20 million GM cars and trucks were sold globally under the = following=20 brands: Buick, Cadillac, Chevrolet,=20 GMC,=20 GM = Daewoo, Holden, Hummer, Oldsmobile=20 (now defunct), Opel, = Pontiac, Saab,=20 Saturn=20 and Vauxhall= .=20 GM operates a finance company, GMAC=20 Financial Services, which offers automotive, residential = and=20 commercial financing and insurance. GM's OnStar=20 subsidiary is a provider of vehicle safety, security and = information=20 services.

GM is the majority shareholder in GM Daewoo = Auto=20 & Technology Co. of South Korea, and has product, = powertrain and=20 purchasing collaborations with Suzuki Motor Corp. and Isuzu = Motors=20 Ltd. of Japan. GM also has advanced technology = collaborations with=20 DaimlerChrysler AG and BMW AG of Germany and Toyota Motor = Corp. of=20 Japan, and vehicle manufacturing ventures with several = automakers=20 around the world, including Toyota, Suzuki, Shanghai = Automotive=20 Industry Corp. of China, AVTOVAZ of Russia and Renault SA of = France.

GM Parts and accessories are sold under the = GM, GM=20 Performance Parts, GM Goodwrench and ACDelco brands through = GM=20 Service and Parts Operations, which supplies GM dealerships = and=20 distributors worldwide. GM engines and transmissions are = marketed=20 through GM Powertrain.

GM's largest national market = is the=20 United States, followed by China, Canada, the United Kingdom = and=20 Germany.

On June = 30, 2006, Kirk=20 Kerkorian, whose Tracind= a=20 Corporation is the third-largest shareholder of General = Motors,=20 proposed a global alliance between GM and the Renault-Nissan group.=20 With Nissan's domestic sales sagging, Carlos=20 Ghosn, the CEO of = both Renault and=20 Nissan=20 expressed interest in possibly acquiring a stake in GM. GM = held an=20 emergency board meeting to examine Kerkorian's proposal; = GM's board=20 reaffirmed its support for CEO Rick Wagoner, and GM's = turnaround=20 plans. On July 14, 2006, after a meeting with Carlos Ghosn, = Rick=20 Wagoner decided to study the matter for 90 days, including=20 non-alliance forming ventures.=20

History

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General Motors Headquarters, Renaissance Center, = Detroit,=20 Michigan.

General Motors = (GM) was=20 founded in 1908=20 in Flint, Michigan, as a holding company for Buick, then = controlled=20 by William=20 C. Durant, and acquired Oldsmobile=20 later that year. The next year, Durant brought in Cadillac, Elmore,=20 and Oakland.=20 In 1909, General Motors acquired the Rapid Motor Vehicle = Company of=20 Pontiac, Michigan, the predecessor of GMC Truck. A Rapid = became the=20 first truck to conquer Pikes Peak=20 in 1909.

GM surpassed Ford=20 Motor Company in the 1920s thanks to the brilliant = leadership of=20 Alfred=20 Sloan. While Ford continued to refine the manufacturing = process=20 to reduce cost, Sloan was inventing new ways of managing a = complex=20 worldwide organization while paying special attention to = consumer=20 demands. Car buyers no longer wanted the cheapest and most = basic=20 model=E2=80"they wanted style, power and prestige, which GM = offered=20 them. Thanks to consumer financing, easy monthly payments = allowed=20 far more people to buy GM cars=E2=80"while Ford was = moralistically=20 opposed to credit. During the 1920s = and 1930s, = General=20 Motors bought out the bus = company Yellow=20 Coach, helped create Greyhound=20 bus lines, replaced intercity train transport with = buses, and=20 established subsidiary companies to buy out streetcar=20 companies and replace the rail-based services with buses. GM = formed=20 = United=20 Cities Motor Transit in 1932 (see General=20 Motors streetcar conspiracy for additional=20 details).

General Motors produced a lion's share = of=20 allied weaponry during World War=20 II in Metro=20 Detroit, including the Sherman=20 tank, playing a critical role in the victory. During the = war,=20 the U.S auto companies were concerned that the Nazis would=20 nationalize American owned factories in Germany. In the = spring of=20 1939, the Nazis had assumed day to day control of American = owned=20 factories in Germany, but decided against nationalizing = them.GM's=20 William P. Knudson had served as head of U.S. wartime = production for=20 President Franklin = Roosevelt who had referred to Detroit as=20 the Arsenal= =20 of Democracy. Today, Detroit is the headquarters for the = U.S.=20 Army Tank-Automotive=20 and Armaments Command, known as TACOM.

General = Motors=20 bought the i= nternal=20 combustion engined railcar=20 builder E= lectro-Motive=20 Corporation and its engine supplier Winton=20 Engine in 1930, = renaming both=20 as the General=20 Motors Electro-Motive Division. Over the next twenty = years,=20 diesel-powered locomotives and trains =E2=80" the majority = built by GM=20 =E2=80" largely replaced other forms of traction on American = railroads.=20 (During World War=20 II, these engines were also important in American submarines=20 and destroyer = escorts.) Electro-Motive was sold in early = 2005.

At one=20 point GM had become the largest corporation registered to = that point=20 in the United States, in terms of its revenues as a percent = of GDP.=20 In 1953 Charles= =20 Erwin Wilson, then GM president, was named by Eisenho= wer=20 as Secretary=20 of Defense. When he was asked during the hearings before = the Senate=20 Armed Services Committee if as secretary of defense he = could=20 make a decision adverse to the interests of General Motors, = Wilson=20 answered affirmatively but added that he could not conceive = of such=20 a situation "because for years I thought what was good for = the=20 country was good for General Motors and vice versa". Later = this=20 statement was often misquoted, suggesting that Wilson had = said=20 simply, "What's good for General Motors is good for the = country." At=20 the time, GM was one of the largest employers in the world = =E2=80" only=20 Soviet state industries employed more people. On December=20 31, 1955,=20 General Motors became the first American corporation to make = over=20 one billion dollars in=20 a year.

After GM's massive lay-offs hit Flint,=20 Michigan, a strike=20 began at the General Motors parts factory in Flint on June = 5, 1998, = which quickly=20 spread to five other assembly plants and lasted seven=20 weeks.

In the late 1990s, GM had regained market = share; its=20 stock had soared to over $80 a share by 2000. However, in = 2001, a=20 sequence of twelve controversial interest rate hikes by the = Federal=20 Reserve to quell the stock market, combined with the S= eptember=20 11, 2001 attacks caused a severe pension and benefit = fund crisis=20 at GM and many other American companies and the value of = their=20 pension funds plummeted. In successive moves, GM responded = to the=20 crisis by fully funding its pension fund; however, its Other = Post=20 Employment Benefits Fund (OPEB) became a serious issue = resulting in=20 downgrades to its bond rating in 2005. The company expressed = its=20 disagreement with these bond rating downgrades. In 2006, GM=20 responded by successfully offering buyouts to hourly workers = to=20 reduce future liabilty; over 35,000 workers responded to the = offer=20 well exceeding the company's goal. GM has successfully = gained higher=20 rates of return on its benefit funds as a part of the = solution. Thus=20 far, GM has managed these economic difficulties which = negatively=20 impacted its share holder value, sales, and market share. .=20 Moreover, the company is proving to be resilient as it = implements=20 its turnaround plan. Its financial difficulties have = undervalued its=20 stock. The stock has rebounded slightly, as of July 12, = 2006, GM's=20 market= =20 capitalization is roughly $16.75 billion as investors = express=20 confidence in GM management's turnaround plans.=20

Nevertheless, since 2000, GM has remained the = world's=20 largest auto maker by ranked according to sales. After oil = company=20 mergers, GM's rank changed to the 5th largest company in the = United=20 States and the world in terms of sales.

On June 30, = 2006 the=20 media reported that General Motors convened an emergency = board=20 meeting to discuss a proposal by shareholder Kirk=20 Kerkorian to form an alliance between GM and Renault-Nissan. GM's=20 board reaffirmed its support for CEO Rick Wagoner and GM's=20 turnaround plans. On July 14, 2006, GM CEO Rick Wagoner = decided to=20 study the matter for 90 days, including non-alliance forming = ventures.=20

General Motors Hughes Electronics

GM=20 Hughes Electronics was formed in 1985 when = Hughes=20 Aircraft was sold by the Howard=20 Hughes Medical Institute to GM for $5 billion. GM merged = Hughes=20 Aircraft with its Delco=20 Electronics unit to form GM Hughes Electronics (GMHE). = This=20 division was a major defense contractor, civilian space = systems=20 manufacturer and communications company. The defense = business was=20 sold to Raytheon in 1997 and the space and communications = division=20 was sold to Boeing in 2000.=20

Auto racing

General = Motors has an=20 extensive history in numerous forms of racing. Vehicles of = most, if=20 not all, of GM's brands have been represented in = competition, with=20 perhaps Chevrolet being the most prominent. In particular, = the Chevrolet= =20 Corvette has long been popular and successful in = international=20 road racing. GM also is a supplier of racing components, = such as=20 engines, transmissions, and electronics.GM's Oldsmobile= =20 Aurora engine platform was successful in open-wheel = Indy-style=20 racing throughout the 1990s, winning many races in the small = V-8=20 class. An unmodified Aurora V-8 in the Aerotech, captured 47 = world=20 records, including the record for speed endurance in the = Motersports=20 Hall of Fame of America. Recently, the Cadillac=20 V-Series has entered motorsports racing.=20

Corporate structure and=20 issues

Current members of the board=20 of directors of General Motors are: Percy=20 Barnevik, Erskine=20 Bowles, John = Bryan, Armando=20 Codina, George=20 Fisher, Karen=20 Katen, Kent = Kresa, Ellen=20 Kullman, Philip=20 Laskawy, Jerome=20 York, Eckhard=20 Pfeiffer, and Rick=20 Wagoner (chairman). York was elected to the board on February=20 6, 2006 to=20 represent Kirk=20 Kerkorian, as E.=20 Stanley O'Neal stepped down.

Rick Wagoner is also = the chie= f=20 executive officer of the company (since June = 1, 2000), = succeeding=20 John=20 F. Smith, Jr.=20

Environmental and social policies

General = Motors=20 was named one of the 100 Best Companies for Working Mothers = in 2004 by = Working=20 Mothers magazine.

General Motors has been a world = leader=20 in philanthropy.=20 For example, GM has given billions of dollars in computers = to=20 colleges of Engineering through its PACE Awards program.=20

General Motors has promoted its clean burning Flex = Fuel=20 vehilces which can run on either E-85 (ethanol) or gasoline. = GM has=20 more vehicles that lead in their class in fuel economy than = any=20 other automaker.=20

Alternative vehicles

General Motors has = long worked=20 on alternative-technology vehicles, and has recently led the = industry with clean burning Flex Fuel vehicles that can run = on eith=20 E-85 (ethanol) or gasoline. The company was the first to use = turbochargers=20 and was an early proponent of V6 = engines in the=20 1960s, but=20 quickly lost interest as the muscle car=20 race took hold. They demonstrated [1] gas = turbine vehicles powered by kerosene, an=20 area of interest throughout the industry in the late 1950s, = but=20 despite extensive thermal recycling (developed by Chrysler) = the fuel=20 consumption was too high and starting torque too low for = everyday=20 use. They were also an early licensee of Wankel=20 engine technology, even developing the Chevrolet=20 Monza around the powerplant, but abandoned the = alternative=20 engine configuration in view of the 1973 oil=20 crisis. In the 1970s = and 1980s, = GM pushed=20 Diesel=20 engines and cylind= er=20 deactivation technologies to disastrous results due to = poor=20 durability in the Oldsmobile diesels (this was a modified = gasoline=20 engine) and drivability issues in the Cadillac 4-6-8 = variable=20 cylinder engines.

In 1996, GM = introduced=20 the EV1, = the first modern mass-produced electric=20 car. Despite the positive publicity generated by this = vehicle,=20 the company never spread the technology beyond California=20 and Arizona, and=20 pulled the plug on the program in 2003.=20

Hybrid initiative

GM delivered the first = commercial=20 hybrid vehicle and was early innovator in hybrid=20 vehicle development, building Diesel-electric trains = since the=20 1930s = and buses = since the=20 1990s = (but=20 without stored energy recovery). In May 2004, GM delivered = the=20 world's first full sized hybrid pickups, and introduced a = hybrid=20 passenger car. In 2005, the new Opel Astra Diesel Hybrid=20 appears. The 2006 Saturn VUE=20 Green Line will be the first hybrid passenger vehicle = from GM,=20 but it too is a mild design. GM has hinted at new hybrid=20 technologies to be employed that will be optimized for = higher speeds=20 such as are encountered in freeway=20 driving. As a great bulk of GM's fleet fuel consumption is = by high=20 fuel consuming light trucks and SUVs, a = modest=20 improvement in their mileage applied across this large fleet = (say=20 twelve to fifteen percent) would in fact conserve a = significant=20 amount of refined fuel.=20

Hydrogen initiative

GM has extensively = touted its=20 research and prototype development of hydrogen=20 powered vehicles, to be produced at some unspecified = future time=20 and using a support infrastructure yet to be built. Since = production=20 and use of hydrogen from fossil fuels is at present about = 1/6 as=20 efficient as direct use of the fuel (e.g, compressed natural = gas),=20 this is a future dependent upon the availability of = extremely low=20 cost electricity - as might be produced at some indefinite = future=20 time by speculative power sources such as nuclear fusion or = free solar=20 power.=20

Marketing

Each of GM's automotive = divisions were=20 once each targeted to specific market segments and, despite = some=20 shared components, each distinguished itself from its = stablemates=20 with unique styling and (to some extent) technology. The = shared=20 components and common corporate management created = substantial economies=20 of scale, while the distinctions between the divisions = created=20 an orderly upgrade path, with an entry-level buyer starting = out with=20 a practical and economical Chevrolet and, (assuming = progressive=20 prosperity of the buyer), moving through offerings of the = several=20 divisions until the purchase of a Cadillac. The divisions = were not=20 competing=20 with each other as much as passing along the same customer, = who=20 would thus always be buying a GM product, with the profits = flowing=20 to this single corporation.

The postwar industry = became=20 enamored with the concept of "planned= =20 obsolescence", implemented by both technical and styling = innovations, with a three year product cycle typical within = the=20 industry. In this cycle, a new basic body shell is = introduced and=20 then modified for the next two years by minor styling = changes. GM,=20 Ford,= =20 and Chrysle= r=20 competed vigorously in this new environment.

By 1958, = the=20 divisional distinctions began to blur, with the availability = of=20 high-performance engines in Chevrolets and Pontiacs, and the = introduction of higher trim models such as the Chevrolet=20 Impala and Pontiac=20 Bonneville that were priced in line with some of = Oldsmobile and=20 Buick's offerings. By the time that Pontiac, Oldsmobile and = Buick=20 introduced similarly styled and priced compact models for = 1961, the=20 old "step-up" structure between the divisions was nearly=20 over.

By the mid 1960s, most of GM's vehicles were = built on a=20 few common platforms and in the 1970s, began to use = nearly=20 identical body panel stampings, differing only in internal = and=20 external trim items. This was seen especially in the compact = passenger vehicles offered by the divisions. Nonetheless, = the=20 1960-75 period was perhaps the greatest in GM's history, as = it=20 eventually held slightly over 50% of the U.S. = market.

The=20 subcompact Chevrolet=20 Vega, introduced for the 1971 model year damaged GM's = reputation=20 more than perhaps any other vehicle in its history. Plagued = by rust=20 problems and an aluminum engine that was prone to failure at = low=20 mileage, the car was not designed and built to the standards = consumers expected from GM.

By the 1980s, GM = frequently=20 "rebadged" one division's successful vehicle into several = models=20 across the divisions, all positioned close to one another in = the=20 market place. Thus, a new GM model's main competition might = be=20 another model spawned off the same platform. This led to = so-called=20 market "cannibalization",=20 where GM's respective divisions spent time stealing sales = from one=20 another, while other more co-ordinated efforts (notably from = the=20 Japanese manufacturers) were allowed to increase their = market=20 penetration. For instance, the company's GMT360 mid-sized = light=20 truck platform has, since its inception in 2002, spawned the = basic=20 Chevro= let=20 Trailblazer, an extended version of the Trailblazer, the = Oldsmobil= e=20 Bravada, the GMC = Envoy,=20 the Envoy XUV (an extended Envoy with a reconfigurable = tailgate) and=20 later, the Isuzu=20 Ascender, Buick=20 Rainier, and, to a lesser extent, the Saab = 9-7X.=20 Though each model had a more or less unique mission, without = custom=20 engine choices or radically different suspension settings = and trim=20 choices, the cars can hardly be told apart.

The fuel = crisis=20 in the 1970s and the shift to unleaded fuels changed the = plans of=20 automakers. Eventually vehicles would have to be equipped = with knock=20 sensors due to less combustive unleaded fuel. Some smaller=20 automakers like Jaguar, could not afford the changeover, = Jaguar was=20 eventually bought by Ford.

During the 1980s, more = changes had=20 to made. Planning ahead, GM had downsized its cars; however, = the=20 American public still preferred the larger sedans. As car = makers=20 offered smaller cars, consumers began shifting their = purchases to=20 SUV's. In the 1980s foreign auto makers promoted the = perception that=20 their smaller cars were of better quality. Then in a = stunning move=20 GM pledged $5 billion to create Saturn, a quality small car. = GM had=20 initially invested about $3 billion to create Saturn. = Foreign=20 automakers responded with clever marketing ploys claiming = better fit=20 and finish, quality, and durability.

Foreign = automaker's=20 claims were disproven. A independent 1987 study conducted by = Seton=20 Hall University Professor Amar Dev Amar concluded that = vehicles=20 produced by U.S. automakers had significantly lower highway = break=20 down ratios than those of either Japanese or European = automakers.=20 Oldsmobile had the lowest breakdown ratio in the study. = Japanese=20 vehicles showed a 25 percent higher rate of breakdown than = U.S.=20 domestics, European vehicles showed a 70 percent higher rate = of=20 breakdown. The study compared vehicle registrations by make = to=20 actual breakdowns rates. Breakdowns for flat tires or = running out of=20 gas were not used.Charles M. Thomas (1987), Study Shows = Import=20 Breakdowns Top Domestics, Automotive News GM cited the = study=20 in commercials to counter its critics.

Foreign = automakers=20 and their media allies regrouped, and the marketing = competition=20 resumed. Foreign automakers tried a different marketing = tactic=20 focusing on technology. Once again, foreign automakers were = just=20 trying to create perception. Honda valve systems even lacked = hydraulic lifters, and Japanese automakers were mostly using = rubber=20 timing belts. In the 1980s, Japanese automakers still had a = long way=20 to go.

In 1989, Acura began showing the NSX, which = had a=20 variable valve timing system to create the perception that = Japan had=20 technology and 'tolerances'. However, in September of 1975, = GM had=20 already patented the first Smart Value, the progenitor of = today's=20 many versions of variable valve timing.

GM would = prove that=20 it had the better tolerances and technology. The Oldsmobile= =20 Aurora V-8 (a 4.0 version similar to Cadillac Northstar) = and the=20 Cadillac Northstar=20 System V-8 emerged and once again placed GM as the = technology=20 leader. The Aurora V-8 would go on to dominate Indy racing = in the=20 small V-8 class throughout the 1990s beating the foreign = competition=20 in nearly every race. An unmodified Aurora V-8 would go on = to win 47=20 world records including the record for speed endurance once = held by=20 Mercedes.

As more cars employed variable valve = timing, GM=20 would introduce its own version which would be more = continuously=20 variable than those from the foreign competition. Using two = sets of=20 cam lobes, the Japanese system did not fully operate until = after the=20 threshold RPM, giving the perception it had = performance.

GM's=20 variab= le=20 valve timing system VVT would operate throughout the = entire RPM=20 range providing superior performance. Japanese automakers = reacted by=20 adding i for intelligence, in a band aid approach to lift = the valves=20 to do what GM's more advanced cam timing system had already = been=20 doing. On efficiency, the Japanese marketing failed again, = GM V-6=20 and V-8 models lead in their respective class for fuel = economy.=20

In the late 1990s, the U.S. economy was on the rise = and GM=20 and Ford gained market share producing enormous profits. = From 2000=20 to 2001, the Federal Reserve, in a move to quell the stock = market,=20 made twelve successive interest rate increases. Following = the S= eptember=20 11, 2001 attacks, a severe stock market decline = precipited a=20 pension and benefit fund crisis across the U.S. economy = affecting=20 many U.S. companies including GM, Ford, and DaimlerChrysler. =

GM began its Keep America Rolling campaign, = which=20 boosted sales and helped the U.S. economy as other auto = makers=20 followed suit. The U.S. automakers saw gross margins=20 deteriorate.

Ironically, GM's turnaround plan had = aleady=20 begun in 2002 with its new Cadillac line-up already in the = works.=20 One of GM's most successful marketing campaigns to date, the = movie=20 sequel Matrix=20 Reloaded featured the new Cadillac=20 CTS designed by Kip = Wasenko. GM had to use the CTS prototype for filming, = since the=20 production model was not yet ready. The movie and the = marketing=20 campaign were a big hit, the public loved it. Cadillac sales = gains=20 moved into the double digit range making it the hotest = selling=20 luxury brand. Cadillac is number one seller of vehicles over = $40,000, proving that GM has the vehicles that real luxury = consumers=20 want.

In 2004, GM redirected resources from the = development=20 of new sedans to an accelerated refurbishment of their light = trucks=20 and SUVs=20 for introduction as 2007 models in early 2006. Shortly after = this=20 decision, fuel prices increased by over 50 percent and this = in turn=20 affected both the trade-in value of used vehicles and the = perceived=20 desirability of new offerings in these market segments. The = current=20 marketing plan is currently to extensively tout these = revised=20 vehicles as offering the best fuel economies in their = class=20 (of vehicle). GM's hybrid trucks have projected mileage = improvements=20 of 25 percent. GM's new line-up of SUV's provide more = horsepower and=20 better fuel economy in their respective class than the = foreign=20 competition.

In the summer of 2005 GM announced that = effective immediately, its corporate chrome emblem "Mark=20 of Excellence" will begin appearing on all recently = introduced=20 and all-new 2006 model vehicles produced and sold in North = America.=20 The move is seen as an attempt by GM to link its name and = vehicle=20 brands more closely. The company's vehicle brands include = Chevrolet,=20 Pontiac, Buick, GMC, Cadillac, Saab, Hummer and = Saturn.

GM=20 promoted sales through an employee discount to all buyers. = Marketed=20 as the lowest possible price, GM cleared an inventory = buildup of=20 2005 models to make way for its 2006 lineup. While the = promotion was=20 a temporary shot in the arm for sales, it did not help the = company's=20 bottom line. Thus, GM has begun a renewed emphasis on = product=20 features in its ads, not just price.=20

Economics

As is the case with the two = other U.S.=20 automobile manufacturers, international exchange rates tend = to favor=20 Japanese and Korean competitors. Japan and China were = accused of=20 manipulating exhange rates to gain a market advantage = through=20 purchases of U.S. Treasuries after the S= eptember=20 11, 2001 attacks in violation of Article IV of the = International=20 Monetary Fund Accords in hearings before the U.S. Senate = Committee on Banking, Housing, and Urban Affairs May 1, 2002 = by=20 economist and former Ambassador Ernest Preeg on behalf of = American=20 manufacturers. MAPI (2002). Preeg=20 Paper on Exchange Rate Manipulation Manufacturer's=20 Alliance As the U.S. trade deficit has soared, China's = currency remains pegged to the dollar. The U.S. has had = little=20 success in convincing China to freely float its exchange = rate. The=20 expected future entry of China = into the=20 U.S. automotive market is likely to be advantaged by = unrealistic=20 currency exchange ratios. Although some commentators have = claimed=20 that European manufactures are somewhat disadvantaged by=20 over-regulation, Germany places market share limits on = Japanese=20 imports, controlling Japan's ability to manipulate the = market. Thus,=20 Germany's automakers have continued to gain global market = share, (as=20 evidenced by the turnaround of Chrysler's fortunes after it = was=20 purchased by Daimler-Benz in 1998). With health care and = benefits=20 paid by their respective governments, foreign manufacturers = have=20 been able to create the perception that their products are=20 "American" made through the use of transplants paying lower = wages.=20 Such transplants are advantaged over GM and Ford through the = employment of a younger, less skilled, non-union workforce, = This=20 phenomenon has caused U.S. auto companies to gradually move=20 production to Canada, where the government pays for health = care. The=20 Canadian single payer health care plan saves automakers = $1500 per=20 vehicle produced compared to the cost for health care in the = United=20 States. David Lindorf (2005)Health Care=20 and the Jobs flight to Canada Counterpunch =

In=20 March 2005, the=20 Governm= ent=20 of Canada provided C$200=20 million in incentives to General Motors for its Ontario = plants, and=20 last fall it provided C$100 million to Ford Motor=20 Co. to expand production and provide jobs, according to = Jim = Harris. Similar incentives were promised to non-North = American=20 auto companies like Toyota, Premier Dalton McGuinty said the = money=20 the province and Ottawa are pledging for the project is = well-spent.=20 His government has committed C$400=20 million, including the latest Toyota package of C$125=20 million, to the province's automobile sector, which helped = finance=20 $5 billion worth of industry projects.

For the first = time, in=20 2004 = the total=20 number of cars produced by all makers in Ontario=20 exceeded those produced in Michigan.=20

GM in China

General Motors is the = top-selling=20 foreign auto maker in China, with a=20 12.5 percent market there. The Buick = brand is=20 especially strong, led by the Buick=20 Excelle subcompact. Cadillac=20 initiated sales in China in 2004, starting with imports. GM = pushed=20 the Chevrolet=20 brand there in 2005 as = well,=20 transferring the formerly-Buick Sail to that marque. The = company=20 manufactures most of its China-market vehicles locally, = through its=20 Shanghai=20 GM joint venture. The SA= IC-GM-Wuling=20 Automobile joint-venture is also successful selling = trucks and=20 vans under the Wuling marque.=20

Corporate restructuring

After gaining = market share=20 in the late 1990s and making enormous profits General Motors = stock=20 soared to over $80 a share. However, in 2000, twelve = successive=20 interest rate hikes by the Federal Reserve to quell the = stock=20 market, and a severe stock market decline following the S= eptember=20 11, 2001 attacks, caused a pension and benefit funds = crisis at=20 many American companies including General Motors. General = Motors=20 rising retiree health care costs and Other Post Employment = Benefit=20 (OPEB) fund deficit prompted the company to enact a broad=20 restucturing plan. Although GM had already taken action to = fully=20 fund its pension plan, its OPEB fund became an issue for its = corporate bond ratings. GM had expressed its disagreement = with the=20 bond ratings; moveover, GM's benefit funds were performing = at higher=20 than expected rates of return. Then, following a $10.6 = bllion loss=20 in 2005, GM acted quickly to implement its restructing plan. = For the=20 first quarter of 2006 GM earned $400 million, signaling a = turnaround=20 had already begun even though many aspects of the = restructing plan=20 had not yet taken effect.

In February 2005, GM = successfully=20 bought itself out of a put option with Fiat for $2 billion = USD=20 (=E2=82=AC1.55 billion). In 2000, GM had sold a 6 percent = stake to Fiat = in return=20 for a 20 percent share in the Italian automaker. As part of = the=20 deal, GM granted Fiat a put = option=20 which, if exercised between January 2004 and July 2009, = could have=20 forced GM to buy Fiat. GM had agreed to the put option at = the time,=20 perhaps to keep it from being acquired by another automaker = such as=20 DaimlerChrys= ler=20 competing with GM's Opel and Vauxhall marques. The = relationship=20 suffered, Fiat had failed to improve. In 2003, Fiat = recapitalised,=20 reducing GM's stake to 10 percent.

In February 2006, = GM=20 slashed its annual dividend from 2.00 to $1.00 per share. = The=20 reduction saved $565 million a year.

In March 2006, = GM=20 divested 92.36 million shares (reducing their stake from 20% = to 3%)=20 of Japanese manufacturer Suzuki, in=20 order to raise $2.3 billion. GM originally invested in = Suzuki in the=20 early 1980s.

On March = 23, a=20 private equity consortium including KKR, Goldma= n=20 Sachs Capital, and Five=20 Mile Capital purchased $8.8 billion, or 78% of GMAC, = GM's=20 commercial mortgage arm. The new entity, in which GMAC will = own a=20 21% stake, will be known as Capmark Financial=20 Group.

On April 3, 2006, GM announced that = it=20 would sell 51% of GMAC = as a whole=20 to a consortium led by = Cerberus=20 Capital Management, raising $14 billion over 3 years. = Investors=20 also include Citigroup's=20 private equity arm and Aozora=20 Bank of Japan. The group will pay GM $7.4 billion in = cash at=20 closing. GM will retain approximately $20 billion in = automobile=20 financing worth an estimated $4 billion over three=20 years.

GM sold its 8% stake in Isuzu = on April=20 11, 2006, to raise an additional $300 = million.

On=20 June 26, 2006, 35,000 GM workers had agreed to company = buyouts, well=20 over the company goal significantly reducing GM's operating = costs=20 and future liabilty.

On June 26, 2006, 12,600 = workers from=20 Delphi,=20 a key supplier to GM, agreed to buyouts and an early = retirement plan=20 offered by GM in order to avoid a strike, after a judge = agreed to=20 cancel Delphi's union contracts. 5,000 Delphi workers were = allowed=20 to flow to GM.

GM continues to open new plants and = modernize=20 existing plants which tends to go unreported. With improving = sales,=20 GM could modify its plans. Plants scheduled to close under = the=20 planned GM restructing include (source: General Motors=20 Corporation):=20

Plants=20	Location=20	Closing=20	Role=20	# Employees=20
Scarbor= ough=20 Assembly van plant=20	Ontario=20	1993=20	Van assembly=20	2,700=20
Moraine=20 Assembly (3rd shift)=20	Ohio=20	2006=20	Mid-size SUV=20 assembly=20	4,165=20
Oklah= oma=20 City Assembly=20	Oklahoma=20	Early 2006=20	Mid-size trucks=20 and SUV assembly=20	2,734=20
Lansing= =20 Craft Centre=20	Michigan=20	Mid-2006=20	Chevrolet=20 SSR roadster assembly=20	398=20
Oshawa=20 Car Assembly No. 1 (3rd shift)=20	Ontario=20	Mid-2006=20	Mid-size=20 sedan assembly=20	3,600=20
Sp= ring=20 Hill Manufacturing Line 1=20	Tennessee=20	Late 2006=20	Saturn=20 Ion sedan and coupe assembly=20	5,776=20
Oshawa=20 Car Assembly No. 2=20	Ontario=20	2008=20	Mid-size sedan assembly=20	2,700=20
Doraville= =20 Assembly=20	Georgia=20	2008=20	Crossovers= =20 and minivan=20 assembly=20	3,076=20
Lansing= =20 Metal Center=20	Michigan=20	2006=20	Metal fabricating=20	1,398=20
Portland=20 Distribution Center=20	Oregon=20	2006=20	Parts distribution=20	95=20
Saint=20 Louis Distribution Center=20	Missouri=20	2006=20	Parts distribution=20	182=20
Pittsburgh = Metal=20	Pennsylvania=20	2007=20	Metal fabricating=20	613=20
= Ypsilanti=20 Processing Center=20	Michigan=20	2007=20	Parts processing=20	278=20
St.=20 Catharines Engine=20	Ontario=20	2008=20	Engine/Transmission parts=20	1,699=20
Flint=20 North 3800=20	Michigan=20	2008=20	Engines=20	2,677

Controversy

On June 30, 2006 a = documentary=20 about the demise of the EV1 and = other=20 electric vehicles entitled "Who=20 Killed the Electric Car?" debuted in theatres across = America,=20 sparking controversy as to the motivation behind the = cancellation of=20 their electric car program.

Consumer advocates, = activists,=20 commentators, journalists, and documentary makers claim GM = had=20 deliberately sabotaged=20 their company's zero emission electric vehicle efforts = through=20 several methods: failing to market, failing to produce = appropriate=20 vehicles, failing to satisfy demand, and using lease-only = programs=20 with prohibitions against end of lease purchase.[2][3][4][5][6]

The process of = obtaining=20 GM's first electric vehicle the EV1 was difficult. The = vehicle could=20 not be purchased outright. Instead, General Motors offered a = closed-end lease for three years, with no renewal or = residual=20 purchase options. The EV1 was only available from specialist = Saturn=20 dealerships, and only in California.[7] Before=20 reviewing leasing options, a potential lessee would be taken = through=20 a 'pre-qualification' process in order to learn how the EV1 = was=20 different from other vehicles. Next came a waiting list with = no=20 scheduled delivery date.[8]

Several=20 weeks before the debut of the movie, the Smithsonian = Institution=20 announced that its EV1 display was being permanently removed = and the=20 EV1 car put into storage. GM is a major financial = contributor to the=20 museum, and both parties denied that this fact contributed = to the=20 removal of the display.[9]=20

External links

* Official Website
* Official Website from GM=20 Europe
* GM's = corporate=20 blogs: Fastlane and FYI
* GMability, GM's corporate = responsibility site
* GM's K-12 = education=20 site
* Corpo= rate=20 history
* GM picture=20 galleries
* GM=20 2006 VIN chart.
* Cheers and Gears = - GM=20 Enthusiast & News Discussion Forum=20

General Motors: Encyclopedia BETA

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