General Motors Merger Case Study

If we talk about mergers in the automobile industry and more specifically about General Motors, the reasons behind any merger or acquisition are the firm’s need to increase its market share, achieve economies of scale or to expand their product range. The mergers in this industry are now usually done in order to increase the speed of the firms overall growth. General Motors have greatly benefited from this theme, as a result, extended its arms into various countries globally through continuously swallow companies vertically and horizontally over time. Moreover, it has translated into General Motors’ core business strategies which improve its competitiveness and market share in early 2000’s.

The second theme of the “GE under Jack Welch: Narrative,

As a result, General Motors spent 1.2 billion in the acquisition, thus GM Daewoo Auto & Technology was born and served as the most potential arm for General Motors expending its manufacturing capability in East Asia despite of the declining market share and legacy of benefit obligations in its US home base in early 2000’s (NYTimes.com, 2006). In this case, it becomes evident that all the efforts defined under the second theme of the “GE under Jack Welch: Narrative, Performative and The Business Model”, were not acting according to plan. This also indicates that there is a flaw in the theme that the CEO of the company might have overseen or

It is revealed by research and thorough study that there is a lack of the principal of private equality in second theme. Due to this, the factors of “over-leverage and potential instability, asset stripping, lack of transparency” occur at last (Froud and Williams, 2007). They lead to the financial imbalance in a firm and result in either bankruptcy or debt.

Moreover, there is a method of applying the principle of private equity in a firm to get better benefits. It is important to consider the customers again and keep their benefits in mind too. Froud and Williams (2007) have found that companies that constantly seeking for sustainable growth are tended to have most of their capital raised from the public market. On the other hand, their investors could able to benefit from company’s equity price fluctuation.

Similarly, if General Motors is to make use of the principle of private equity, it needs to avoid focusing on what Froud and Williams (2007) claimed that individual and institution investors such as pension or mutual funds failed to exit public market by selling their stake. If they do so, the profit generated will only land in the hands of a few people. The company itself will not be able to see much progress and will land in debt as it had