General Motors, Too Big to Fail
By CATHERINE CAVAZZINI
Once a flourishing empire has turned into a dwindling company. During the first three months of this year, General Motors has reported one billion dollars in losses. At the moment, this company is heading down a rocky road. With an uncertain future, General Motors can lead to the potential destruction of many communities.
Published in a CNN article on November 30, 2018, Lydia DePillis states that “14,000 General Motors workers [are] in line for layoffs in the coming months…”
As bankruptcy begins to plague General Motors, a vast number of employees are being dismissed, leaving them with limited employment options. As this issue spreads, there is no doubt that more workers will suffer a similar fate and possibly encounter their own financial struggles.
With a corporation as immense as General Motors, the termination of many manufacturing plants can lead to a serious decline in the local economy. According to The Economist, statistics show that “In America alone, [General Motors] spends $50 billion a year buying parts and services from a network of 11,500 vendors and pays $476m in salaries each month” (“A Giant Falls”).
When looking at the numbers, it is clear that the absence of General Motors would devastate companies providing materials and employees getting paid, since General Motors is the one providing revenue to each person and business.
One major reason General Motors is plunging into debt is due to the type of automobile that they choose to manufacture at a time. This brand has always been known for their cars and SUVs. In the 1990s when consumer demands started to shift to trucks, General Motors met this demand a little too strong.
According to Sharon Carty, “The market was awash in new truck models, and profits were sapped by discounts needed to keep sales boiling."
Once General Motors realized the interest and demand of consumers start to shift, they immediately flooded the market with trucks, which created a struggle with prices to keep buyers interested. As a result, General Motors is spotted with issues when it comes to manufacturing, which strains the economy.
As it is fairly clear that General Motors have their own concerns to handle, it is crucial that they get their act together for the sake of the community. While it is evident that they are filing for bankruptcy, the downfall of General Motors can absolutely destroy the economy as we know it today.
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Works Cited
"A giant falls." The Economist, 4 June 2009, www.economist.com/briefing/2009/06/
04/a-giant-falls. Accessed 12 Dec. 2018.
Carty, Sharon Silke. "7 reasons GM is headed to bankruptcy." ABC News,
abcnews.go.com/Business/story?id=7721675&page=1. Accessed 12 Dec. 2018.
DePillis, Lydia. "GM workers will have job options — but they may not be as
good." CNN Business, 30 Nov. 2018, www.cnn.com/2018/11/30/economy/
gm-job-market/index.html. Accessed 12 Dec. 2018.