General Motors Essays Example

The existence of General Motors in the automobiles industry has been characterized by a positive slope in the returns and profits reported in the financial statements of the company. The company has consistently appeared in the Fortunes Magazine of the best 500 companies internationally ranking at the top ten. In 2012, the company ranked at number five with this rank moving downwards to number seven both in 2013 and 2014. In 2013, the company was able to a depressing decrease in profits by 32.7% compared to 2012 under the control of Daniel Akerson as the Chief Executive Officer. These results led to a change in leadership by choosing Mary Barra in 2014 leading to a negative change in profits reported by 13.6%. The revenues collected within the year however increased by 2.1% which was a positive result in the organization. The new leadership also led to an increase in sales of the firm by 7% acquired from recall of motor vehicles in the market. The company however faced many critics after it was proved that the vehicle model released to the market was faulty reading to several fatal accidents.
In 2014, the stockholders equity in General Motors changed by 12.5 which can be attributed to the disposure of the 19% stocks held by the government from 2013. This was in completion of the biggest and historic IPO n the company introduced by the then CEO Dan Akerson in 2010. There was a reduction in the Earnings per Share (EPS) of the company shares by 0.54 from an EPS of 2.92 reported in 2013. An analysis of the movement in EPS from 2012 indicates a negative slope by 18.5 in 2014 thus reducing the returns given to shareholders when the financial year was closed. A reduction in reported profits within the firm in 2014 led to a consecutive reduction in returns given to investors. Increased competition, change in leadership and the defective motor vehicle model released to the market highly affected the profits made in the firm.
The company desired to extend their marketing strategy in China by introducing 17 extra models in China to increase its 15% market share. This goal has not been fully acquired yet, but the initial roll-over was made making the CEO positive of higher profits in 2015. There has also been a notable increase in sales within its principle markets such as Asia, the U.S and South America. General Motors has had a setback on its sales level due to recalls made regarding the faulty more vehicles released to the market. There were more than 2.3 million cars called back by the company to repair the discrepancies which would cost almost $1.7 billion. this would cover the customers loaner cars during the rectification period, and company overheads while rectifying the vehicles. This also had a negative impact on the company public image as the fatalities would not be monetary compensated rather, left a scare in the community.
General Motors has made it in the Fortunes most successful companies ranking among the top 50 most profitable. These results had been regardless of the negative trend in earnings reported since 2011 when it reported $9.1 billion of earnings. There has also been a change in control with Mary Barra replacing Dan Akerson in 2014. The recent recall fiasco caused by the faulty model released has also had its effects on the earnings in the company thus reducing the EPS and Return to Investors.