The American Automotive Industry Incurred A Major Crisis

Between 2008 and 2009, the American automotive industry incurred a major crisis, on the heels of the housing market collapse occurring in 2007 (Klier Ribenstein, 2013). General Motors was already in a financial vulnerable situation at this time, having already filed a $10.6 billion dollar loss three years earlier (United States Securities and Exchange Commission, 2005). In 2007, General Motors losses for the year were $38.7 billion and its sales had dropped a full forty five percent from the year before (Weardenm, 2009; Usborne, 2008). By the end of 2008, the company was in such bad shape that analyst predicted that the company would have the liquidate or discontinue operations without any assistance from the government (Bosco Plante,†¦show more content†¦This restricting led to the death of three of its brands, Saturn, Pontiac, and Hummer, and the selling of another (Sweden’s Saab) to Spyker, a Dutch auto group (Krebs, 2009; Ahlander Bailey, 2010). The company was left with five business segments and only four brands (Chevy, Cadillac, Buick, and GMC) (Senter McManus, 2013; Maynard, 2009b). This decision to file for bankruptcy and restructure the company was an excellent one because studies have shown that restructuring of the internal workings of an organization increases both the efficiency of the company and its value to the stockholders (Brickley Van Drunen, 1990). The positive effects of this restructuring is evidenced by the ability of the government to successfully sale the entirety of its GM stock in 2013 for a total price of $39 billion and General Motors realizing a 19% increase in sales in 2014 (McGrath, 2015; Isidore, 2013). To determine which vehicle models in the remaining brands of Cadillac, Buick, Chevy, and GMC to continue producing, the new General Motors would have needed to undergo some research process to determine which brands had the most growth potential and were the most value maximizing. There are three types of research that I would propose for General Motors to undergo: a statistical analysis, a consumer survey, and a dealership survey. The statistical analysis would study the past and