GM Fritz Henderson And Bankruptcy " To Little To Late!
The GM bankruptcy sent shockwaves throughout the entire United States. General Motors was the symbol of American economic domestic power and innovation. Unfortunately, times change and so does market demands. GM had slowly fallen on hard times over recent years and the mismanagement of its executives also contributed greatly to the problems.
In March of this year, shortly after the U.S. president ordered CEO Rick Wagoner to be fired from his position in General Motors, GM Fritz Henderson assumed his position at the helm. Unfortunately for Wagoner, his attempts at restructuring the company after receiving numerous loans and bailouts didn't work, and as a result, the task was handed over to GM Fritz Henderson, not to mention that he was also unable to save the company from collapse. Quite understandably, many people are wondering why the task was handed to Henderson in the first place, considering he had been vice president at that time when General Motors applied for bankruptcy.
Why Did General Motors End Up Going Bankrupt? To a great extent, one can say that "planned obsolescence" played a major role in General Motors losing a substantial amount of money during the past ten years. In an attempt to stimulate the market for new you vehicles, General Motors came up with a concept known as, "planned obsolescence". Essentially, this was a design concept to insure that a vehicle would only last for a limited amount of time or miles before needing to be replaced. Considering that imported vehicles were known to last beyond 200,000 miles, building a car not to last was by all accounts a poor concept.
Gas mileage was also an issue. GM cars simply did not get great gas mileage. One reason for this was that most GM cars were sports models or they were huge cars along the lines of an SUV. For a time, consumers loved the gas consuming vehicles. However, these solid sales were common during the era of low gasoline costs. When gasoline process skyrocketed, these large cars were not popular sellers. In time, GM simply could not move models.
The bottom line is that when General Motors encountered these problems, together with numerous other problems, the executives, including GM Fritz Henderson and Wagoner, failed miserably. As a result, the company was losing billions of dollars as it headed towards insolvency.
Poor managerial decisions regarding union contracts which they couldn't afford, and a disastrous joint venture with Renault and Nissan, only served to make matters worse than they already were. In fact, some of these decisions put such a strain on the company's resources, that it was virtually impossible for a turnaround.
So, what did Wagoner and GM Fritz Henderson do in order to solve the problems? Unfortunately, that is a question which many people would still like an answer to because essentially, no concrete plan was ever put into place. In fact, the company experienced further losses after a failed attempt to sell their European wing. In a last desperate attempt to avoid the bankruptcy court, General Motors decided to accept a bailout loan from the Federal government. Unfortunately, this plan didn't work either and General Motors could no longer avoid bankruptcy filing; an event which effectively meant the end of General Motors as we knew it. Perhaps most ironic of all, is the fact that this was also the start of GM Fritz Henderson as CEO.
To a great extent, the end of General Motors was a bittersweet event, considering that the bankruptcy still allows the company to exist, even though it's a far cry of its former self. Funnily enough, instead of General Motors, it has now been dubbed "Government Motors" instead, thus officially putting an end to any era.
In March of this year, shortly after the U.S. president ordered CEO Rick Wagoner to be fired from his position in General Motors, GM Fritz Henderson assumed his position at the helm. Unfortunately for Wagoner, his attempts at restructuring the company after receiving numerous loans and bailouts didn't work, and as a result, the task was handed over to GM Fritz Henderson, not to mention that he was also unable to save the company from collapse. Quite understandably, many people are wondering why the task was handed to Henderson in the first place, considering he had been vice president at that time when General Motors applied for bankruptcy.
Why Did General Motors End Up Going Bankrupt? To a great extent, one can say that "planned obsolescence" played a major role in General Motors losing a substantial amount of money during the past ten years. In an attempt to stimulate the market for new you vehicles, General Motors came up with a concept known as, "planned obsolescence". Essentially, this was a design concept to insure that a vehicle would only last for a limited amount of time or miles before needing to be replaced. Considering that imported vehicles were known to last beyond 200,000 miles, building a car not to last was by all accounts a poor concept.
Gas mileage was also an issue. GM cars simply did not get great gas mileage. One reason for this was that most GM cars were sports models or they were huge cars along the lines of an SUV. For a time, consumers loved the gas consuming vehicles. However, these solid sales were common during the era of low gasoline costs. When gasoline process skyrocketed, these large cars were not popular sellers. In time, GM simply could not move models.
The bottom line is that when General Motors encountered these problems, together with numerous other problems, the executives, including GM Fritz Henderson and Wagoner, failed miserably. As a result, the company was losing billions of dollars as it headed towards insolvency.
Poor managerial decisions regarding union contracts which they couldn't afford, and a disastrous joint venture with Renault and Nissan, only served to make matters worse than they already were. In fact, some of these decisions put such a strain on the company's resources, that it was virtually impossible for a turnaround.
So, what did Wagoner and GM Fritz Henderson do in order to solve the problems? Unfortunately, that is a question which many people would still like an answer to because essentially, no concrete plan was ever put into place. In fact, the company experienced further losses after a failed attempt to sell their European wing. In a last desperate attempt to avoid the bankruptcy court, General Motors decided to accept a bailout loan from the Federal government. Unfortunately, this plan didn't work either and General Motors could no longer avoid bankruptcy filing; an event which effectively meant the end of General Motors as we knew it. Perhaps most ironic of all, is the fact that this was also the start of GM Fritz Henderson as CEO.
To a great extent, the end of General Motors was a bittersweet event, considering that the bankruptcy still allows the company to exist, even though it's a far cry of its former self. Funnily enough, instead of General Motors, it has now been dubbed "Government Motors" instead, thus officially putting an end to any era.
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