The birth of an auto colossusGeneral Motors (GM) is not only the world's leading manufacturer of cars and trucks, including brand names Pontiac, Saturn, Buick, Cadillac, GMC, Chevrolet, and Oldsmobile. With over 400,000 employees worldwide, it is also the largest industrial enterprise in the world. Founder William Durant was a pioneer of the automotive conglomerate, realizing that individually produced automobile brands had a much better chance of surviving a slow year if grouped together. Between 1908 and 1910, Durant bought 17 companies and concentrated them in Flint, Michigan. In 1923, president Alfred Sloan implemented a decentralized management system that is still in place at GM, and has been emulated by countless other corporations.
The competition heats up
In the late 90s, fierce competition from overseas manufacturers began to challenge GM's industry dominance. In response, GM focused on aggressive global expansion, including hiring former Toyota consultants to guide them into the Japanese market. GM positioned itself in that market with significant stakes in both Suzuki and Isuzu. In 1999, GM upped its stake in Isuzu to 49 percent and bought 10 percent of Suzuki in 1999. In late 1998, a joint venture with SAIC produced the first Buicks for the Chinese market. And by moving into low-cost vehicle markets in Brazil and Russia, GM broadened its penetration of foreign consumer markets, amassing a client base and establishing brand strength long before its competitors arrived on the scene.
Not exactly labor friendly, even with the Saturn commercials
GM's relationship with unionized labor has been tenuous. In 1981, after choosing to move its production facilities to low-cost developing countries, the layoffs began. For nearly a decade, GM disposed of thousands of its former employees, some of them third-generation GM workers, leaving the corporation's Flint, Michigan base economically stricken. These actions earned GM lasting notoriety and a damaged public image, which was further damaged with the release of Michael Moore's documentary film on Flint's decline, Roger & Me. In 1996, a United Auto Workers strike crippled 24 North American plants for nearly three weeks. Though the strike ended, little was resolved, setting the stage for future labor troubles. In 1998, a seven-week strike actually had a noticeable effect on quarterly reports on the gross national product: GM lost an estimated $2.8 billion during the dispute, which halted its entire North American production. Oddly, GM is also home to the Saturn line, a company whose cars' marketed appeal relies heavily on the subsidiary's image as a utopian work environment, complete with a cheerful, well-treated labor force.
One bright spot in GM's labor relations was its decision, in June 2000, to offer full medical, dental and prescription drug benefits for same-sex partners of their hourly and salaried employees. The expanded coverage became available in August 2000.
Better luck in the courtroom
GM is still well-regarded in the courtroom, however. The company extracted an apology from NBC in 1993 in response to the network's report about the safety of GM pickups' sidesaddle gas tanks. NBC reported that they were prone to explosion when the vehicles were sideswiped. Though GM was eventually forced to recall 4.7 million trucks, a 1995 unanimous federal appeals ruling overturned a settlement class action suit involving the pickups. GM also pitched a four-year legal battle with Volkswagen over an executive, Ignacio Lopez, who left GM's corporate office for a Volkswagen position, bringing with him sensitive GM files. In 1996 Lopez resigned, and in 1997, Volkswagen agreed to pay GM $100 million in damages, as well as purchase a billion dollars worth of parts from GM over the next seven years.
A time to rebuild - and reorganize
Still recovering from the 1998 strikes, GM has embarked on a new round of cost cutting. The company placed high priority on making its small car operations profitable, for it estimates a loss of $500-$600 on every small car it sells. Under the 1999 Project Yellowstone, GM aimed to cut costs and boost productivity by having suppliers co-design and partially assemble modules before shipping them to GM plants, thus saving both time and money. The auto giant combined its North American andinternational operations in 1998.
To streamline its operations, GM completed the spin-off of its auto parts arm, Delphi Automotive systems, in May 1999. While the move brought in $11 billion for GM, the lost revenue placed it neck to neck with rival Ford Motors as largest auto manufacturer.
Headlining the Indy 500
The Indianapolis 500 plans to honor GM at its 86th car race in May 2002. As part of a year-long 50th anniversary commemoration, the peppy Corvette is scheduled to pace the event for the fifth time.
Amateur athletic competition - and GM
GM was the top sponsor at the Olympics. It also supplied vehicles for the U.S. team and was the onlydomestic automaker to advertise on television during the games.
Humming along
In March 2002, the company announced plans to open a Hummer dealership in Milwaukee. (Hummers are the huge quasi-military vehicles popularized during the Gulf War.) Hailed (and billed) as an adult amusement park, the technologically advanced store is scheduled to open in July 2002, will look like half of a giant military hut, with military fans and designs hanging from the ceiling. Amazingly, this dealership will coincide with the launch of the newest H2 SUV.
