General Motors commonly recognized as GM, is an American automaker that designs, manufactures and markets vehicles across the globe
Introduction
General Motors commonly recognized as GM, is an American automaker that designs, manufactures and markets vehicles across the globe. Its headquarters is located in Detroit, Michigan. GM is one of the companies that have been dealing with denationalization. Denationalization occurs when an asset owned by the state is made available to the private companies (Abel, 2011). It is evident that denationalization of GM proved more beneficial to the firm than most critics predicted.
Market Costs Reduction and the Creation of New Opportunities
Denationalization of GM permitted the firm to reduce its market cost while developing new market opportunities that substantially increased its revenues. According to GM financial reports, the company made about $862 million within the first quarter of the financial year (Taylor, 2010). Moreover, the net revenue increased from $ 22.40 billion to more than $30 billion. The process further opened new market opportunities. It allowed GM to sell approximately 184,000 vehicles, a 6.4 percent increase in comparison with 174,000 vehicles sold in the previous year. Furthermore, the company added new products to its four brands for North America market in order to sustain a strong demand for the new products. Although the profit was not comparable with Ford Motors $2 billion profits, it was a great deal in regard to shape of the firm during the previous year (Taylor, 2010). Such data indicate that marketing costs were significantly lowered, and new opportunities were established.
Income Improvement, Local Market Benefit and Reduction in Business Expenses
Denationalization of GM enabled the firm to increase its revenue by more than 6 percent thus getting out of the debt from the US government (Zu?rn & Walter, 2012). Furthermore, GM used some of the bailout fund to settle debts that were hindering its productivity and competitiveness. After paying the debts to the government, the company was in a position to market its product at reasonable price that permitted maximization of the revenue and profits (Taylor, 2010). Apart from the general motors, the government has largely benefited from the denationalization process. Since the company has already paid the government loans using the bailout fund obtained after the government purchased 61 percent of the stocks, a public offering of the company’s stock is expected (Taylor, 2010). As a consequence, the public will have an opportunity to recoup most the government investment within the firm. In addition, the company has managed to reduce its operations overheads.
Influence of Technology and Effect on Production Units
Technology has the potential to revolutionize GM production process and the overall revenue. The use of technology will permit the firm to produce modern and competitive vehicles such as electric vehicles that would significantly enhance its overall sales and revenue because many consumers strive to conserve the environment (Abel, 2011). Increase in revenues resulting from increased sales will expand the business thus enhancing its continuity. Furthermore, the use of technology in the firm has significantly reduced the operation, and production costs since GM use the technology-oriented machines. As a result, the company has limited the use of human capital to monitoring of the assembly line machines only (Zu?rn & Walter, 2012). Furthermore, the company has integrated a computer point operating system using the barcoding system to control waste, shipping and reordering process (Abel, 2011). The use of technology has largely enabled the firm to enhance its operational efficiency.
The Effect of the Product on the Jobs and Wages both Domestically and Internationally
GM did not alter its position both domestically and internationally. Though it has remained as GM for the most parts, the firm is on a gradual recovery from what analysts term as a brink to bankruptcy to its previous dominances in the auto industry (Abel, 2011). However, once a key player in the industry, GM has lost its influences in the industry it has dominated for a long time. However, after denationalization the GM wages remained the same while the revenue increased sharply (Taylor, 2010). Therefore, the GM staffs did not necessarily earn more by working for the firm irrespective of the growth in profits.
Environmental Influence Both Domestically and Internationally
The denationalization process of GM posed insignificant effect on the environment both domestically and internationally. However, GM has significantly become greener over the years. It has been reported that when the company strives to minimize the economic footprint, the influence is usually evident on the environment (Abel, 2011). Nonetheless, the costs of key transformations established by the firm have led to some operation hardships, but GM perceives them as essential risks. After the denationalization, the company returned to its previous dominance with establishment of a new car line (Zu?rn & Walter, 2012). The car line was the firm’s most eco-friendly vehicles. Besides, the company established a new automobile assembly plant in strive to promote greener and sustainable business processes (Taylor, 2010).
Denationalization of the Supply Chain in Relation to Global Economy
It is apparent that the USA dominates the auto industry; the US population offers the biggest national market in the world. However, during the economic crisis, Asian companies such as Honda, Toyota and Hyundai took over the market. The crisis in the USA hit GM making the firm lose its superiority and flexibility. In the motor industry, denationalization is essential for the global economy. The process restricts the country from exercising total dominance over the motor industry. It places more control of the firm on the organization and the public who usually forms the largest stakeholders (Abel, 2011). In assisting economic elevation especially to less developed countries in the global economy, denationalized companies play a critical role. Privatization is critical in the supply chain since it expands the group where the suppliers can be drawn from (Zu?rn & Walter, 2012).
Conclusion
In conclusion, it is evident that the US government has played a critical role in saving GM from the brink of bankruptcy. Denationalization has proved essential to GM than most business analysts and critics predicted (Zu?rn & Walter, 2012). However, it is evident that the company has managed to revert to the years of profitability, steady growth and environmental conservation.
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