The Primary Cause Of the FAilure

1. Do you think the primary establish of the failure of the two companies that guide to the bailout was a commission failure, a prole failure, a shareholder or customer failure, some other reason, or a combination of the above? Why is that the case? General Motors was founded by William Billy Durant on September 16, 1908 and has several brands under names such(prenominal) as Chevrolet, Cadillac, and Buick. Chrysler was founded by Walter Chrysler in 1925 and it also has many an(prenominal) brands such as Jeep, Dodge, Ram, and Fiat. These are two of the biggest American carmakers in the United States and their demise was sound to comprehend.I think there are many reasons that collectively conduct to the failure of both GM and Chrysler. One of the causes for the demise of both companies was management failure. counselling is supposed to lead by making the right choices for themselves and their customers. Management fai take to set up fiscal policies that would benefit their comp anies in the long run. The financial nuclear meltdown of Wall Street led to a national crisis, which do GM and Chrysler unable to borrow money to keep them afloat. The financial meltdown trickled down to consumers who were not able to energize loans either to purchase or lease cars.The financial meltdown and car sales having been at their last-place point in a decade is the reason that GM and Chrysler had to data file for bankruptcy. GM and Chryslers management also failed to anticipate the rise of verve prices. Gas prices skyrocketed to almost four dollars a gallon and with the fragile enjoin of the economy, it made people very conservative most their driving. The rise of burn out prices was almost like a death sentence to Chrysler and GM. They have relied on the sales of sport utility vehicles or SUVs as their main ancestor of income.The sport utility vehicles carry an already high price rag week and when you add the gas prices you get vehicles that nobody wants to purcha se. People wanted to get rid of their SUVs because they yet cost too much money to operate. Customers switched to littler more fuel-efficient vehicles because it became more of a necessity than a choice. Unfortunately GM and Chrysler were not ready to meet the new demand for fuel-efficient vehicles. The cars that GM and Chrysler had on the market were not as fuel efficient as their external counterparts, which made the financial stability for the American carmakers uncertain at beat.GM and Chryslers management failed to acknowledge competition and innovation. Carmakers like Toyota have for many years tried to stay innovative and ahead of the competition by taking risks and investing in research and contractment. Toyota developed one of the best selling cars in American history called the Prius, which is a very fuel-efficient car. On the other hand GM and Chrysler are just starting to develop electric and hybrid cars. Unfortunately strange carmakers have the market corner becaus e neither GM nor Chrysler succeeded in forecasting the needs and wants of the American People.GM and Chrysler still have a bad reputation for the quality of their cars. today when people think of reliable, fuel-efficient and quality cars most people think of foreign carmakers. GM and Chrysler are trying to change the perception of the quality of their cars, just when a company takes this long to try to change it is very big(a) to win back some of their customers. I would personally hesitate to bargain a car from either company because of what friends and family have said about the problems they have encountered with their cars. I believe it is the management of both companies fault that led to their financial demise.Like any other company in the world, it is the people at the top who have the control, knowledge, and resources to make the tough choices and right decisions. I just do not see how it could be the fault of workers who just follow orders and have no say about the mana gement of the company. It cannot be the fault of the customers because most people would not buy a intersection of poor quality or from a bankrupt company. One of the largest shareholders for GM at the time was Jerry York. He begged the board of directors to take drastic measures to dispense with the company and they decided to ignore him.Now, they are doing some of the things Jerry York suggested because the federal political science is forcing them. According to my research, most people feel that it was the poor management that led the American carmakers to bankruptcy and the need for the federal government to bail them out. Citations septette reasons GM is headed to bankruptcy http//www. usatoday. com/money/autos/2009-05-31-gm-mistakes-bankruptcy_N. htm After 101 years, why GM failed http//www. bspcn. com/2009/06/01/after-101-years-why-gm-failed/ GM in Crisis5 Reasons Why Americas Largest Car Company Teeters on the Edge http//www. popularmechanics. com/cars/news/industry/429237 9