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General Motors Continuing Battle against Structural Costs


Just like its arch-rival, Ford, General Motors has had a woe-filled year in 2006. Since the biggest tragedy in modern times, the September 11 attacks, the real funding of their health care system was put in the limelight, it being under funding specifically. While that may be the case, the company is still the number one automotive company in the world, and with steps to battle the structural costs incurred in the past years and other losses, the company is slowly making progress over the economic crisis it is facing. It may take some time but the company is definitely moving in the right direction when it comes to improving their financial status.

A step taken by the company was to reduce its hourly paid employees by offering them early retirement and buyouts. This was done in the face of mounting financial problems in health care costs. Up to 35,000 workers were affected by this move done on the part of the company. This included blue collar workers involved in the production of GMC parts and cars, while losing that big number of employees, it seems that the exodus of such an amount of the workforce did not cut down the productivity of the company.

That radical step was undertaken even after they have lowered their annual costs from billion to billion last year. The company was reported to have lost .03 billion on the first nine months of last year and that is on top of .6 billion they have lost in the year 2005. It would seem that General Motors is facing a huge mountain to climb but the men behind the company are taking steps to alleviate the problems faced.

Though improvements are made, the company’s chief financial officer Fritz Henderson said that they are still losing money and there is still much to be done.

Steps like the establishment of a fuel cell exhibit at Disney World’s Epcot theme park in Florida will be a good step towards educating the people on how hybrid cars work. After all, General Motors is on the forefront of developing hybrid cars for the public. Ever since the 1930’s, when they developed the Diesel-electric trains, they have been on the lookout for more environment friendly fuel or alternative vehicles. The company is geared towards producing cars with the best fuel economy on their class. They even hinted the production of hybrid trucks which will have gas-mileage improvement of up to 25 per cent which is much better than what the current fuel-economy leader Toyota offers.

As the demand for such hybrid cars, which as of now is gaining a huge number of consumers, and the production of the company of such cars, the future for the company looks bright. But for now, they have to face their financial problems first to get to that very promising future.


About the Author: Corey Putton is a 28-year old bachelor from Pittsburgh, PA who has been around cars for the better part of his life. He now works online and writes all about his passion: cars. He is also a certified mechanic.




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