Question

c.Briefly describe the restructuring plan and its outcome for General Motors – be sure to address whether value was created and how (if the business failed please comment on the impact to shareholders).

Answer 1

The restructuring plan of General Motor involves shuttering down all its manufacturing plants across the globe. It has around five plants in North America, which has planned to discontinue its services. Including also selling vehicles. An expected loss of 14,000 jobs can be witnessed all around the world. It is a significant action that can strengthen the core business of the organization and can capitalize on mobility to ensure its cost-efficiency. Its outcome on General Motors are as follows:

• It is expected to enhance annual adjusted automotive cash flow statements

• It can contribute cash saving process

• It can lower the expenditure

No, the value was not created. It harms stakeholders

• It caused the loss of jobs of around 14,000 employees

• It reduced 15% salary of contractual employees

• Streamline recruitment process reduced by almost 25%