The Primary Cause Of the FAilure

1. Do you withdraw the primary cause of the failure of the two companies that led to the bailout was a caution failure, a worker failure, a shareholder or customer failure, some otherwise reason, or a combination of the above? why is that the case? General Motors was founded by William Billy Durant on September 16, 1908 and has several brands under names such as Chevrolet, Cadillac, and Buick. Chrysler was founded by Walter Chrysler in 1925 and it also has many brands such as Jeep, Dodge, Ram, and Fiat. These are two of the biggest American car constituters in the United States and their demise was hard to comprehend.I think there are many reasons that collectively led to the failure of both GM and Chrysler. adept of the causes for the demise of both companies was management failure. Management is supposititious to lead by making the right choices for themselves and their customers. Management failed to set up financial policies that would benefit their companies in the long run. The financial meltdown of Wall Street led to a national crisis, which made GM and Chrysler unable to borrow money to keep them afloat. The financial meltdown trickled down to consumers who were not able to start out loans either to purchase or lease cars.The financial meltdown and car sales having been at their terminal point in a decade is the reason that GM and Chrysler had to file for bankruptcy. GM and Chryslers management also failed to anticipate the rise of energy prices. Gas prices skyrocketed to almost four dollars a gallon and with the tenuous state of the economy, it made hatful very conservative about their driving. The rise of gas prices was almost standardized a death sentence to Chrysler and GM. They train relied on the sales of sport utility vehicles or SUVs as their main source of income.The sport utility vehicles carry an already high price tag and when you tote up the gas prices you get vehicles that nobody wants to purchase. People wanted to get rid o f their SUVs because they expert cost besides much money to operate. Customers switched to smaller more fuel-efficient vehicles because it became more of a necessity than a choice. Unfortunately GM and Chrysler were not ready to meet the new demand for fuel-efficient vehicles. The cars that GM and Chrysler had on the market were not as fuel efficient as their conflicting counterparts, which made the financial stability for the American carmakers uncertain at best.GM and Chryslers management failed to acknowledge competition and innovation. Carmakers like Toyota have for many years assay to stay innovative and ahead of the competition by taking risks and investing in research and development. Toyota substantial one of the best selling cars in American history called the Prius, which is a very fuel-efficient car. On the other hand GM and Chrysler are just starting to develop electric and hybrid cars. Unfortunately foreign carmakers have the market cornered because neither GM nor Chrysler succeeded in forecasting the needs and wants of the American People.GM and Chrysler still have a bad reputation for the flavor of their cars. Nowadays when people think of reliable, fuel-efficient and reference cars most people think of foreign carmakers. GM and Chrysler are trying to change the perception of the quality of their cars, but when a company takes this long to try to change it is very hard to win stern some of their customers. I would personally hesitate to buy a car from either company because of what friends and family have said about the problems they have encountered with their cars. I believe it is the management of both companies fault that led to their financial demise.Like any other company in the world, it is the people at the top who have the control, knowledge, and resources to make the tough choices and right decisions. I just do not see how it could be the fault of workers who just follow orders and have no say about the management of the compan y. It cannot be the fault of the customers because most people would not buy a product of ridiculous quality or from a bankrupt company. One of the largest shareholders for GM at the time was Jerry York. He begged the board of directors to take drastic measures to save the company and they distinct to ignore him.Now, they are doing some of the things Jerry York suggested because the federal government is forcing them. According to my research, most people feel that it was the poor management that led the American carmakers to bankruptcy and the need for the federal government to bail them out. Citations Seven reasons GM is headed to bankruptcy http//www. usatoday. com/money/autos/2009-05-31-gm-mistakes-bankruptcy_N. htm After 101 years, why GM failed http//www. bspcn. com/2009/06/01/after-101-years-why-gm-failed/ GM in Crisis5 Reasons wherefore Americas Largest Car Company Teeters on the Edge http//www. popularmechanics. com/cars/news/industry/4292379