Corporate management perspective on Chrysler operations and strategy

¶ … Working as a Manager for Chrysler in the Corporate Headquarters Office

Review on General Motors' activity

Core questions in General Motors

One of the most important questions regarding General Motors relates as to who is actually in charge of the decision making process. In other words, a core question within GM regards identifying the highest authority. Some believe this person to be Renault-Nissan CEO Carlos Ghosn, whereas others tend to incline towards major shareholder Kirk Kerkonian. However, according to the most current sources, the highest power member of General Motors is chairman and CEO Richard Wagoner.

The second core question within GM regards whether the corporation should continue the struggle for the international leader position or should they step down and allow Toyota to become leader. In doing so, GM would save time, money and energy to focus on their primary goals, that of reducing costs and increasing profits.

Future intentions and strategies

Currently, General Motors is engaging in numerous activities and desires to implement strategies in order to reduce costs. For instance, CEO Richard Wagner has been able to cut down costs by 9 million dollars. The necessity to drastically reduce costs was a direct consequence of General Motors' near bankruptcy experience. Had Wagoner not interfered, GM would have probably been by now allied with Renault-Nissan and in great debts.

The next step in implementing the cost reducing strategy will follow two simultaneous courses of action. First of all, the CEO intends to cut down the costs adherent to the workforce, and secondly, he will reduce the costs adherent to the production sector, more precisely for the automobile design.

To support labor cost reductions, General Motors will commence negotiations with the representatives of the United Auto Workers, negotiations from which GM hopes to achieve cheap and secure workforce, by also sustaining the laid off personnel.

Yet another significant change that is prone to take place within the walls of General Motors regards the diversification and specialization of the design process. In this order of ideas, "Vice-Chairman Robert a. Lutz is going to simplify the way GM designs cars. Each region of the world, for the first time, will take responsibility for the engineering of particular models for the global market. The U.S., for instance, will focus on sports cars, SUVs, and pickups. Europe will handle midsize cars." Vice-Chairman stated that by implementing this strategy, the company will benefit of a new, original and improved image, and more importantly, the strategy will imply a reduction of the costs.

However, as profitable as these all sound the actual implementation of the above mentioned strategies implies a great deal of risk, which the current status of the corporation does not support. Still on the rebound after its near bankruptcy experience, General Motors 1.9 billion dollar profits do not encourage major investments and risks.

Even thought the company has been able to overcome some major difficulties, their situation is yet unstable. It is true that General Motors is an internationally recognized company and a symbol of the American society; however, in comparison with other international automobile and motorbike producers, such as Japanese Suzuki Yamaha or Toyota, GM fades. Given the increased amount of available workforce and the lower budget percentages distributed to cover labor costs, combined with he latest hi-tech in the field of automobile engineering, Japanese producers are the strongest competitors on the international market, posing a real threat not just to General Motors, but also to Chrysler and all major automobile and motorbike producers.

Take Toyota for instance. The international leader on the market of auto making, in 2004, Toyota has faced serious complaints from U.S. customers and was obliged to suffer the damaging of their reputation and loses of over 9.3 million dollars. It was expected that such an incident would not end the decade successful activity of Toyota and the company rapidly overcame the moment. Since then, Toyota retook its leading position and is currently threatening to over throne General Motors.

Yet another strategy adopted by both American competitors (General Motors) as well as Japanese produces regards the outsourcing of their labor force. This means that the producers have chosen to contract workforce from abroad in order to reduce costs and benefits from the services of better qualified personnel.

Another course of action that will be taken by Chrysler competitor Toyota is to improve the quality of their finance and accounting department in order to keep a clear evidence of all activities taking place within the corporation.

A note addressed to General Motors' chief executive officer proposed a rather intriguing strategy and it basically referred to the corporation's falling behind and allowing Toyota to become the international leader. In doing so, General Motors would no longer be preoccupied by marinating its positions and would finally possess the time and energy to focus on reaching other main objectives such as increasing profits. It is generally agreed that achieving the first position is seldom as difficult as it is maintaining that position. And in the case of General Motors, being number one implies several costs for acquiring the best high technology devices and services, devices and services that generally bring about the necessity to cut down other vital expenses. In other words, by stepping out and allowing Toyota to become the automobile international leader, General Motors would gain precious time and energy to focus on achieving other core goals.

3. Chrysler competing with General Motors