Management Notes

Management Notes

Reference Notes for Management
GM Layoffs

GM Layoffs – General Motors Layoffs for North American Workers | OB

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GM Layoffs |Background of General Motors|General Motors Best Brands |General Motors Layoffs for North American Workers |Plants to shut down by General Motors| Personal Analysis of the decision taken by General Motors

Background of General Motors

General Motors is considered one of the world’s largest leading automobile company which was founded by William C. Duran in September 1908 and has been operating its business around the globe maintaining industry leadership (Essays, 2018). It’s been more than a century that General Motors is operating its business with more than 180,000 employees serving around six continents in the world. The Company offers its products in a variety of price ranges like $10,000 to $100,000 targeting the entire customer’s segment from the middle class to the luxury class as per their preferences and affordability.

General Motors Best Brands

General Motors Best Brands

Some of the best brands offered by General Motors are:

Vehicle Brands Other Brands
• Chevrolet
• Buick
• GMC
• Cadillac
• Holden		 • ACDelco
• Cruise
• GM Defense
• Motors Holding
• Supplier Discount

With the turn in the 21st century, the world is growing in terms of advancement in technology and the concern for environmental protection seems to be mandatory for the automobile industry in order to sustain in the market. General Motors is focused on creating vehicles that are environmentally friendly from the supply chain to manufacturing with the introduction of vehicles that runs with biofuels, fuel-efficient vehicles, etc.

General Motors always believed in bringing innovation with the adaptation of new technologies that is preferred by the users as it meets their need and demand of having a vehicle that is comfortable, spacious and luxurious (James, 2011). This is supposed to be the only company that has the capacity to produce self-driving vehicles at a scale with fully integrated solution. The company is focused on self-driving cars and all-electric vehicles which will not emit any gases that can be harmful to the environment and the people living in it.

General Motors Announces Sweeping Layoffs for North American Workers 

Why did GM layoff workers?

The given video in the CLA1 assignment talks about the strategic decision taken by the General Motors Company regarding cutting off its North American employees for the purpose of restructuring the organization. The decision of restructuring the organization leads to the cut off of around 15000 workers in North America (Jones, 2019).

What GM plants are closing?

The company has been also planning to shut down its five big plants four in America and one in Canada which are as follows:

Plants to shut down by General Motors

Location
  • Lordstown Complex GM Plant
  • Ohio Detroit-Hamtramck
  • Michigan Baltimore Plant
  • Maryland Warren Transmission Operation, Michigan

America
  • Oshawa, Ontario

Canada

The given video about GM Layoffs explains that one of the GM’s Canadian plants at Oshawa, Ontario which produces Chevrolet Impala is the home for General Motors and it has been more than a decade the company is operating there (Feick, 2018). It is considered that GM didn’t build Oshawa rather Oshawa built General Motors.

The given video in the CLA1 assignment also talks about the take of the President of the United States “Donald Trump” regarding this massive layoff. The president promises that there will be auto jobs coming to the people around the places like Ohio where the massive layoffs by General Motors are taking place. Donald Trump also threatened General Motors that he will be cutting all the subsidies that have been provided to them.

Also, the tariff that has been imposed by the US president on steel and aluminum is costing automakers in America around the extra cost of billions of dollars which has created a big market shift.

Further, the video highlights that the Company wants to shift toward future-forward technology with a leaner and profitable business. GM is planning to stop building vehicles with poor sales and which are not preferred by the customers. The company is more focused on innovation which led it to shift towards electric cars and automated self-driving cars in the future.

How layoffs affect the company?

The decision of sweeping GM Layoffs didn’t affect the stock price of the GM as it was presented in the video which is actually dependent on the customer buying behavior and how the customer feels the company is going to perform in the nearby future. The news regarding the strategic decision of employee layoff has been welcomed by the investors which led to the increase in the stock price of GM by 4.8% which was the highest closing price GM has had in about these three months (CBSNews, 2018). It is shown in the video that the GM didn’t close any Mexican and Chinese GM plants might be because of the far below low wages in those countries than in America.

The video emphasizes that the blue color workers who built the cars for more than 100 years and supported the company as well as also helped in building America are affected by the layoffs in numerous ways. The livelihood of the North-American workers seems to be affected drastically (Lau, 2018). Not only the workers but also the ancillary units around the plant are affected by the strategic decision of layoffs by the company. The area around the plant is designed in such a way that the shutting down of the GM plant will affect the entire city.

GM feels they need to optimize themselves as per the change in market conditions and preferences of the customers in order to position themselves in the long-run. The company believes that it is better to do restructuring when both the company and economy are strong.

Personal Analysis of the decision taken by General Motors

In my opinion, the decision taken by General Motors regarding restructuring and shift toward the future-forward technology of electric cars and automated self-driving cars is right. In turn with the 21st century, the needs and preferences of the customers are changing rapidly because of the advancement of science and technology. I believe it is completely ok for a company trying to adapt to the changing market conditions and planning to produce vehicles that are preferred by the customers considering the environmental factors.

I think for any organization whether it’s GM or others the first priority is always focusing on long term growth and sustainability of the Company. From the video case, it has been clear that the customers no longer want those types of products that have been produced by the plants that are being shut down by 2019. Customers are the king of any business and if the business does not try to adapt to the changing demand of customers it will no longer sustain in the long run and can make a profitable business.

Yes, I agree that there are certain kinds of obligations the Company needs to fulfill for its employees. For those thousands of employees affected by layoffs, the company plans in providing many severance programs so that their lives to a better extent. As per my analysis, the Company is not obliged to prioritize the ancillary units that are affected by the layoffs and plant shutdowns than their own Company. Ancillary units are formed as they found the opportunity in the state where the GM plant was operating. That’s why I feel the company is not responsible for it.

For example

Electronic Arts, which is considered as one of the leading American Video Game Company around the world plans to cut 350 of its employees in the marketing, publishing, and other areas which includes closing offices in Japan and Russia (Schreier, 2019). The Company took this strategic decision in order to cope with the changing environment, deliver all those commitments, and improve customer service by meeting the needs of the players. The Company wants to adopt a new international strategy for serving the players in those markets in a better way. The company is providing severance for the employees that are laid off.

Conclusion

General Motors believes in bringing innovation with the adaptation of new technologies that is preferred by the users as it meets their need and demand of having a vehicle that is comfortable, spacious, and luxurious. And I believe that the decision taken by General Motors regarding restructuring and shift toward the future-forward technology of electric cars and automated self-driving cars is right. I believe it is completely ok for a company trying to adapt to the changing market conditions and planning to produce vehicles that are preferred by the customers considering the long term sustainability of the company.

It is concluded that when a Company wants to go for innovation and adaptation of new technology, the behavior of the individuals and processes affects it as some of the individuals are not ready about the resistance to change which can create job losses which were clearly shown in the given case of General Motors.

References

CBSNews. (2018, November 27). GM layoff announcement sparks outrage – and stock increase. Retrieved from https://www.cbsnews.com/news/gm-layoff-announcement-sparks-controversy/

Essays, U. (2018, November). Overview Of General Motors And Toyota. Retrieved from https://www.ukessays.com/essays/management/overview-of-general-motors-and-toyota-management-essay.php?vref=1

Feick, J. (2018, November 27). GM announces sweeping layoffs; spares Flint. Retrieved from 25NEWS: https://nbc25news.com/news/local/gm-announces-sweeping-layoffs-spares-flint

James. (2011, May 17). A brief introduction of the General Motors. Retrieved from Aierfu: http://aierfu.cc/en/NewscenterDetails.asp?newsid=46

Jones, S. (2019, February 2). GM to lay off 4,250 salaried workers in North America starting Monday. Retrieved from World Socialist Website: https://www.wsws.org/en/articles/2019/02/02/auto-f02.html

Lau, J. (2018, December 15). What GM’s Layoffs Tell Us About Disruption in the Automotive Sector. Retrieved from MakeInnovationWork: https://medium.com/make-innovation-work/what-gms-layoffs-tell-us-about-disruption-in-the-automotive-sector-383b96ec1b04

Schreier, J. (2019, March 26). EA Lays Off 350 People In Marketing, Publishing, And More. Retrieved from Kotaku: https://kotaku.com/ea-lays-off-350-people-in-marketing-publishing-analyt-1833575289

 

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