This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
3/29/2006
general motors is looking to increase prosperity with buyouts
General Motors (GM) is looking to become a smaller company by allowing employee buyouts and selling a major part of it's mortgage department. Some analysts believe this is an unwise decision and that GM should invest in it's motor vehicles to help reverse it's loss from last year. The problem with employee buyouts is soaring health care costs for GM.
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3 comments:
-1 on Will's post for inconsistent capitalization.
I think GM should focus on its core competency. Unfortunately, most people think this is cars. It isn't. Long ago GM ceased to be about making cars, and became a mechanism to provide a sinecure for workers and management. They are doing the right thing by cutting in this area.
Dr. Tufte said that GM should focus on its core competency. This is very true. It reminds me of conglomerate firms. There may be a good company up for sale, but if it doesn't match the conglomerate's core competency and strategy, economies of scale and other positives from acquiring companies will not occur.
It's two years on, and GM is still a loser.
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