General Motors was number one in this year’s Global 500 with $178 billion in revenues (Taylor 1). However, when it comes to the competition, GM lags behind the other two U.S. auto-makers in most categories considered significant. Aside from its underperformance where the competition is concerned, GM has also faces severe internal woes, from its constant battles with labor (strikes costs the manufacturer $1.2 billion in profits in 1997) to its lack of ability to perform basic functions like launching new models on time (Taylor 1). International trends do not make the picture any rosier. Chrysler has formed with Daimler-Benz adding another tough competitor in an already competitive global market. The market is struggling in Europe, a former stronghold for GM, and the economic woes in Asia have disrupted GM’s plans for success there. The company is often criticized for its mossy, sluggish and inward-looking policies. Even though earnings levels are record-breaking this year, there are many indicators that the competition is greatly outperforming General Motors, “GM eked out a record $6.7 billion in earnings last year, but that produced a net margin of just 3.9%, disturbingly low in what was a strong year for auto sales. It failed to match Ford’s $6.9 billion in profits even though Ford had $25 billion less in revenues. GM’s stock, not surprisingly, has performed dismally. Since Smith took over the company, the company’s return to shareholders has been 165.7% vs. 404.5% for Chrysler and a stunning 497.6% for Ford” (Taylor 4).
General Motors also earns less revenue per vehicle than either Ford or Chrysler, mainly because GM models are less popular with consumers. General Motors also makes much less profit per vehicle than Chrysler and continues to fall further behind Ford because of its high operating costs. Worker productivity has shown improvement, but it still falls short of Ford. The behemoth nature of t...