Sustainability in General Motor

Sustainability in General Motor1. Introduction and executive summaryAfter the bankruptcy of General Motor (GM) in 2009, a “new” General Motor emerges. However, although GM managed its investment well that is the reason of its bankruptcy, it still faces many challenges. One of its biggest challenges is the matter of recall. In 2014, GM recalled over 20 million cars including 500 thousand of Camaro. (Li, 2014) The total amount that GM has recalled cars during 2014 already surpluses the predicted car sales of 2014. According to NAICS (2014), GM has already known the problem of ignition switch for many years. However, GM recalled cars only after at least 13 deaths of drivers. In addition, NAICS (2014) also points out that it is odd that GM failed to recall for a component which might reduce the cost of recall. The problem of recall has already high done much harm to GM’s sustainability. This report is based on journals, news and academic papers to analyze the problem of recall in GM and discuss the possible solution for GM to help GM improve its sustainability.2. Overview of General MotorThe predecessor of GM is Buick that is founded in 1907. In 1908, Buickand Olds were merged and changed name into GM. It developed into a huge international motor company and occupies huge market shares. In 2002, it introduced mixed-energy cars that stunned the whole auto industry. However, in 2009, GM applied for bankruptcy. The reason for its bankruptcy included three main points: shortsighted strategy, excessive welfare and economic crisis (Barron, 2009). GM only focused on the traditional cars and ignored the new energy. When the oil price highly increased, the sales reduced immediately. Additionally, the excessive welfare contribute to the burden of GM. More seriously, the recession of American economy has exacerbated the dilemma. After GM restructured, the officers proposed a “New GM”. However, a problem in the “Old GM” still remains - recall.3. An introduction to recall in GMRecall seems normal in the auto industry. In 1996, Ford recalled 7.9 million cars; during 2009 to 2011, Toyota recalled over ten million cars; GM recalls ten million to twenty million cars on average every year (Sabatini, 2014). However, the recall in GM is reported as abnormal. According to Bennett (2014), the staff in GM knew the defect in 2004, and an engineer once purposed a solution to the problem that was approved at first and cancelled at last. In addition, during a March 2007meeting, an official of GM pointed out the problem. GM still did not take any action. Healey and Meier (2014) point out that the key may move from “run” to “accessory” without any warning, meaning that cars may stop in the road without any presage. They also suggested that the air bag protection is not as useful as the expected, which is also a part of the reason of recall in 2014 and is also reported in 2004. Ivory (2014) indicated that GM did not recall cars as soon as it found the problem, possibly because it wanted to avoid the cost as it has seen the damaging scandal that engulfed Toyota. She also mentions that GM should have cost only a few to address the problem. The huge recall has heavily damaged the sustainability of GM.4. Analysis of the recall in GMThe huge scale of recall exposed at least three problems inside GM: technology or design, testing and management.Firstly, recall is basically a technological or design issue. Engineers in GM design cars and set the procedure of manufacturing. Due to the technological limit or the defects of design, the matter appeared. In this issue, obviously, it is a matter of design. The auto industry has developed for over one hundred years, even in the past, the key did not move from“run” to “accessory”, however, GM made such a failure in 2004. It makes no sense that technological limits lead to the problem. Design is an essential and the core part of car manufacturing. There is no doubt that the design failure in GM influences its future development adversely.Secondly, this recall of GM is also a matter of testing or reporting. According to Bennett (2014), the employees of GM have the ability to imitate the situation where the key may slide to accessory. However, employees in GM did not find the problem or they did not report it, leading to at least 13 death and many injuries. This case indicated that GM did not build a satisfactory enough system for testing. Employees have the ability to find the problem but company did not get the report, revealing that employees may be slack during their work or the management did not pay enough attention to the safety issue. If GM cannot ensure the quality of its cars, the reputation it obtained during the past over one hundred years may be destroyed very soon. Therefore the testing or reporting problem may also be a obstacle of the sustainable development of GM.Finally, this failure exposes a huge problem in the internal and external management. According to Bennett (2014), the management once received the solution of an engineer. However, it cancelled the project atlast. Firstly, the management did not give enough importance to the safety problem. Robles (2014) indicates that GM cancelled the purpose without sufficient explanation. Moreover, GM failed in the disclosure. Bennett (2014) also points out that GM failed to disclose the report of potential hazard of this problem over the past ten years. Disclosure is an important part of sustainability. If GM wants to ensure the future development, it has to be more transparent and help the stakeholder know more about the operation of it. In addition, car, as a means of transportation, must be safe. Thus, GM needs to emphasize high on the safety of its cars for its long-term development.5. ConclusionIn conclusion, although GM has purposed a “New GM” slogan and wants to convince people that it is different from the “Old GM”and will be better in the future, it still has many problems that harm its sustainability. One of the most serious issue is the recall problem. GM should make its recall as a normal recall resulting from technological limits and take action as soon as possible. It cannot handle recall issues as this case that delays for ten years, which causes a seriously negative influence on its reputation and heavily weaken its sustainability.Reference:[1]Barron, J, 2009, “After the storm: Bankruptcy and credit in wake of Chrysler and GM”, July/August 2009, Business Credit.[2] Bennett, J. 2014, Congress to Investigate GM Recall; House Energy and Commerce Committee to Look at Slow Recall; Auto Maker Names Anton Valukas to Lead Internal Probe, New York, N.Y.[3]Bonny, N, 2014, “GM recall deaths at 19 and counting ; Toll rises as claims trickle in for faulty ignition switch case”, 16th September 2014, USA Today.[4]Davidson, P, 2014, “What do you recall”, 22 th September 2014, USA Today.[4]Hale, E, J, 2014, With GM slow to recall, trust in carmaker shaken 2014, , McLean, Va.[5]Ivory, D, 2014, “New General Motors Recall Covers 800,000 More Vehicles”, 24th June 2014, New York Times[6]James, R.H. & Meier, F. 2014, Deaths double; GM widens recall, McLean, Va.[7]NAICS, 2014, “NAICS Code”, NAICS association, North America.[8] Roble, F. 2014, Big G.M. recall sets off questions about crashes, Paris.[9]Rockholdm, J, 2014, “A giant falls; The bankruptcy of General Motors 2009”, Earth Mother News, 2014.。