What's Happening At General Motors?
Lately, the future of the American auto industry hangs in the balance of global events.One sign of the world's deeply troubled economy is General Motors' filing for bankruptcy protection on June 1, 2009, as part of a plan to shrink the automobile manufacturer to a smaller,more sustainable size and make the federal government a 60 percent owner of the company.
According the Associated Press, GM's filing for bankruptcy is the largest for an industrial corporation and the fourth-largest in the history of the United States. GM officials reported that the company had $172.81 billion in debt and only $82.29 billion in assets.The U.S. Treasury announced it would bail out the company with $30 billion in taxpayer money, which was on top of the $20 billion GM received previously in low-interest loans earlier in the year. Canada's government announced that it would provide an additional $9.5 billion in financial support.
'This New GM'
The day the company filed for Chapter 11 bankruptcy protection, GM Chairman Kent Kresa explained, "Today marks a new beginning for General Motors....The board is confident that this new GM can operate successfully in the intensely competitive U.S.market and around the world."
The background story of GM -- beyond recent headlines describing financial restructuring,mass layoffs and plant closings -- provides many clues about why the government has chosen to step in to save the company rather than simply let it collapse. In his latest book, Why GM Matters, William J. Holstein provides readers with an inside look into the troubled company. He explains the deep connections General Motors has to the rest of the American economy, as well as how the company has continued to change the way it does business throughout its long history. The story he tells helps readers make better sense of the drastic actions being taken by its leaders today by putting recent changes into a historical context.
Although it juggles a multitude of issues, a single point pervades Holstein's book: The United States is much better off with GM around than it would be without it. Why does this company matter so much? He writes, "Simply put, if America is to remain a First World nation, with the sort of standard of living that it implies, it must maintain an American-owned auto industry." By keeping GM afloat, he explains, the country will improve its chances of keeping all of the other American companies that provide GM with technology, parts and services in this country as well, and keeping these skills and technologies within our national economy helps the United States maintain its ability to compete on the global stage.
A Difficult Turnaround
Throughout Why GM Matters, Holstein details the actions that have been going on behind the scenes of a company often painted by the media as a laggard that has fallen behind the times by making gas-guzzling vehicles -- inferior to Toyota's fuel-efficient cars -- while ignoring the needs of an increasingly eco-conscious population faced with rising gas prices. To counter the critics, Holstein describes a company working hard to turn itself around in "the largest, most dramatic, and most difficult corporate turnaround effort in American economic history."
Why GM Matters explores a company whose vast history stretches back more than a century. Keeping an eye on the employees behind the scenes of GM's story, Holstein offers readers a compassionate glimpse into the parts of the company that many critics overlook when maligning GM for its strategic blunders. By putting real faces on the people within GM who are most affected by the decisions made at the top of the company, the author makes a strong argument for cheering on the efforts being made to save GM from oblivion.
Why GM Matters offers anyone interested in the complex machinations of the U.S. automobile manufacturing sector rich food for thought with which they can form an educated opinion on its fate. With deep insight into GM's history, people, critics, competitors, leaders, technology and global competitive landscape, Holstein captures the dynamic story of the collision between a stalwart company and the rapidly changing economy of the 21st century.