GM BAILOUT CASE

TEAM 5

APARNA RAMESH
MANSI KA
NIJANTH
RAGHAV S
RAJARAMAN
SAIKARTHIK
SUBADHRA R
 COMPANY HISTORY
• General Motors was founded by William Billy Durand on
Sep 16 , 1908
• In 1899, Opel entered the growing automobile market with
Opel-Patent-Motorwagen System Lutzmann and became a
part of General Motors thirty years later
• GM acquired more than 20 companies including
Oldsmobile, Cadillac, and Oakland
• Philosophy of the company is “ A car for every purse and
purpose”
 CRISIS (case facts)
• Problems faced by the company during this period brought
them at the verge of bankruptcy
• GM was unable to bring out new vehicles that suit the
needs of the customers
• GM had to face high costs associated with employee
healthcare and pension benefits
• The above mentioned problems coupled with global
financial crisis and recession adversely impacted the
revenues of the company
 CRISIS (case facts)
• On June 1, 2009, GM enters bankruptcy
• Troubled Asset Relief Program (TARP) assisted the company
by providing them $30Bn of government money
• This led to the creation of new company called General
Motors Company
• Creditors of “Old GM” received a 10% share of the new
company and proceeds from the sale of “Old GM”
 CRISIS TIMELINE
• May 2005: GM posts a $1.1 Bn first quarter loss, blaming it
on union overhead and high fuel prices harming SUV sales
• July 26, 2006: GM loses $3.2 Bn in the second quarter,
absorbing cost of early retirement buyout packages to
30000 blue collar workers
• Dec 12, 2008: The US senate votes to oppose a government
bailout for GM, despite support from President George W
Bush
• Dec 19, 2008: President Bush approves bailout plan since it
involves employees and other stakeholders
• July 10, 2009: The US treasury purchases GM assets, giving
the government primary ownership of the company
• Sept 4, 2012: GM reports August 2012 sales were up 10%
from the previous year, with Chevrolet passenger car
sales up by 25%
QUESTIONS