GM History - A Brief History
The founding of General Motors on September 16, 1908, drew little
attention. Motorcar firms were appearing virtually everywhere.
Success for the young automotive concern was not predestined. There was no
guarantee of a place in the market or assurance of any profit. Of the
nearly 1,000 companies that tried to build and sell motor vehicles prior
to 1927, less than 200 continued in business long enough to even offer a
commercially suitable vehicle.
Most of the companies that comprised the young General Motors Company were
weak, and their operations were uncoordinated. Many were in debt. It was
not until the 1920s, when a new concept of management was forged and a new
concept of product emerged, that GM really began to prosper.
General Motors sales for its first full fiscal year ending September 31,
1909, totaled 25,000 cars and trucks, 19 percent of total U.S. sales. Net
sales totaled $29,030,000 and its payroll at the peak of the manufacturing
season numbered more than 14,000 mostly in Michigan. In 1995, GM sold 8.3
million cars and trucks worldwide with net income of $6.9 billion and
worldwide employment averaging 714,000 workers.
General Motors has 284 operations in 35 states and 158 cities in the
United States. In addition GM of Canada operates 21 locations, GM de
Mexico operates 5 locations, and GM has assembly, manufacturing,
distribution or warehousing operations in 49 other countries, including
equity interests in associated companies.
General Motors has operations in 41 countries outside North America and
accounts for about 17 percent of the vehicles sold in the world's
competitive markets. GM operations outside North American accounts for
over one-third of the corporation's vehicle sales. GM products (of all
types) are sold in 170 countries around the world.
GM History, 1902-1920
The nucleus of the fledgling General Motors was the Buick Motor Car
Company. It was formed in 1902 by David Buick in Detroit and later moved
to Flint, Michigan, where William Crapo Durant, "king of the carriage
makers," took control. Durant, who brashly predicted that "a million cars
a year would someday be in demand," oversaw Buicks rise to become the
second largest and most influential automobile manufacturer in the
country. He also began organizing a network of
suppliers and producers.
When General Motors Company was incorporated as a New Jersey firm, Flint
had a population of about 25,000 and four streetcars. It was more than
three months before Flint papers carried a single story about the new
enterprise.
Early members of the infant GM family were Buick, Oldsmobile, Cadillac,
Oakland (now Pontiac), Ewing, Marquette, Welch, Scripps-Booth, Sheridan,
and Elmore, together with Rapid and Reliance trucks. GMs other U.S.
automotive division, Chevrolet, became part of the corporation in 1918.
Only four of the car lines -- Buick, Oldsmobile, Cadillac, and Oakland -continued making cars for more than a short time after their acquisition
by GM. By 1920, more than 30 companies had been acquired by General
Motors, by purchase of all or part of their stock. Two were forerunners of
major GM subsidiaries -- the McLaughlin Motor Company of Canada (which
later became General Motors of Canada Limited) and the Fisher Body
Company, in which GM initially gained a 60 percent interest.
Although legally a New Jersey corporation, all of GMs original facilities
were in Michigan, and Mr. Durant encouraged other firms to locate their
facilities in the state.
By 1911, the idea of a general staff organization had gained more than a
toehold in the company, and a director of production was appointed. The
company began to "create a general staff of mechanical engineers, gasoline
engine engineers, designers, production experts and other experts not
attached to any particular factory, but whose advice and services would be
available (to) ... the necessarily more limited staff of each individual
factory."
A testing laboratory also was established, as the annual report said, to
"serve as an additional protection against costly factory mistakes and
give the purchaser of every one of our machines an additional guarantee
not merely for his comfort, but to assure his safety."
This notion of consulting, advising, fact finding and testing is the
genesis of GMs present comprehensive staff organization. Today it covers
such fields as design, engineering, manufacturing, research, labor
relations, marketing and advertising, personnel, purchasing, consumer
relations and service, environmental and energy activities,
industry-government relations, communications, finance and legal.
About the same time GM was getting started in Michigan, an engineering
development that was to prove critical to GMs subsequent leadership in
research was occurring in Dayton, Ohio -- the introduction of the electric
self-starter. Designed by Charles F. "Boss" Kettering at his Dayton
Engineering Laboratories Company, it first appeared on 1912 Cadillacs and,
by doing away with the dangerous and unpredictable hand crank, definitely
popularized motoring. More than any other development, the electric
self-starter is credited with making motor cars more accessible to a
greater part of the population.
"Boss" Kettering later became the scientific mastermind of the
corporation, in charge of its unparalleled research and engineering
programs. He joined GM in 1920 when the Dayton Research Laboratories were
merged into GM and moved the Research Laboratories to Detroit in 1925. He
remained with the corporation until his retirement June 2, 1947.
The General Motors Company officially became General Motors Corporation on
October 13, 1916, when incorporation papers were filed in Delaware. By
August 1, 1917, the new corporation had acquired all the stock of General
Motors of New Jersey, which was formally dissolved two days later.
It was during World War I that GM, for the first of four times in its
history, would turn its facilities and experience to the production of war
materials. It did so again in World War II, the Korean conflict, and
Vietnam.
With no previous experience in manufacturing military hardware, the young
American automobile industry within 18 months completed a turnaround from
civilian to war production. The result was an outpouring of weaponry
credited with the winning of the war, changing the face of Europe, and
giving rise to the United States as a world power.
Between 1917 and 1919, 90 percent of GMs truck production was directed to
the war effort. GMs truck operations supplied the Army with a variety of
models; Cadillac supplied Army staff cars along with V8 engines for
artillery tractors and trench mortar shells; Buick built Liberty airplane
motors, tanks, trucks, ambulances and parts; Central Products Division was
formed to build a drop forge plant that was later taken over by Chevrolet;
and Central Foundry at Saginaw was rushed to completion.
GM History, 1921 - 1940
It was also in this same period that Alfred P. Sloan, Jr., who went on to
guide General Motors from May 10, 1923, until April 2, 1956, first as
president and then chairman, first became associated with Mr. Durant. Mr.
Sloan had built up a $50,000 investment in the Hyatt Roller Bearing
Company of Harrison, New Jersey, to assets of about $3.5 million in 24
years.
When Hyatt was brought into General Motors through the United Motors
Corporation for $13.5 million, Mr. Sloan joined the corporate management.
Under his direction, General Motors grew from a firm that accounted for
about 10 percent of new car sales in the United States in 1923 to become
the largest producer of cars and trucks in the world.
"Billy" Durant had created an enterprise that in 1908 consisted of just
one truly successful auto manufacturer (Buick) but it also contained the
building blocks for the future to become a multifaceted corporation.
Durants entrepreneurial creation was about to be directed by men with the
abilities to harness and organize its potential during an expansionary
period of U.S. industry; both the country and General Motors were entering
the era of modern management.
By 1920, in the midst of a nationwide economic crisis, GM was on the verge
of financial collapse. The crisis marked the turning point in General
Motors history. New men were asked to assume leadership of the
corporation. A new concept of management was forged and a new concept of
product emerged. Coordinated policy control replaced the undirected
efforts of the previous years.
As its principal architect, Mr. Sloan was credited with creating not only
an organization which saved General Motors, but a new management concept
that was adopted by countless other businesses. Fundamentally, the concept
involves coordination of the enterprise under top management, direction of
policy through top-level committees and delegation of operating
responsibility throughout the organization. Within this framework,
management staffs conduct analysis, advise
policy committees and coordinate administration.
General Motors thus became an organization of organizations, maintaining a
balance between individual and group management, preserving the advantages
of each.
Mr. Sloans idea was to establish "decentralized operations and
responsibilities with coordinated control." At the individual level, his
policy was simple: "Give a man a clear-cut job and let him do it."
The new product concept evolved from the staffs that GM had set up,
leading to the recognition of the varied nature of the demand for motor
vehicles; GMs new approach -- "a car for every purse and purpose" and
continuing improvement of all its vehicles. The policy led to different
kinds of vehicles for different customers. People were buying more than
just basic transportation. They also wanted comfort, good looks,
performance that was better than just adequate, and above all, periodic
improvement.
In improving its products, GM developed many automotive firsts which
helped aid its success. Prior to World War II, they included the first
all-steel one-piece roof, two-cycle diesel truck engines, independent
front-wheel suspension and automatic transmission.
GM History, 1941 - 1969
By 1941, GM accounted for 44 percent of total U.S. sales, compared with 12
percent in 1921.
Before Americas entry into the war against the Axis nations, GM turned out
weapons along with automobiles. After Japan struck at Pearl Harbor in
1941, the industrial skills that GM developed were applied with great
effectiveness. Civilian automobile production was halted early in 1942 and
the Corporations plants were completely turned over to the war effort.
GMs contributions during World War II dwarfed its efforts during World War
I, offering a dramatic example of the vital importance of a nation at war
being able to call upon well-managed and experienced industrial resources.
From 1940 to 1945, GM delivered defense material valued at $12.3 billion.
The success of GMs tremendous wartime role lay in its peacetime managerial
philosophy. Decentralized, highly flexible local responsibility made
possible the almost overnight conversion from civilian production to
building and supplying a war machine -- a timetable of days and months
never believed possible by the enemy. GMs contribution spanned virtually
every conceivable product from the tiniest ball bearing to massive tanks,
naval ships, fighting planes, bombers, guns, cannons,
and projectiles. GM alone turned out 13,000 airplanes and one-fourth of
all U.S. aircraft engines.
Car-making resumed after the war, and postwar expansion saw production
soar. The cars of the 50s were all-new, their styling capturing the
pent-up wartime desire for change. The decade of the 50s was one of
celebrations, sales records, anniversaries, and ingenious innovations in
styling and engineering. Cadillac celebrated its 50th anniversary in 1952;
the following year in June, Buick built its 7-millionth automobile. GMs
50-millionth automobile, a 1955 Chevrolet Bel Air, rolled off an assembly
line in November 1954, and the Corporation celebrated its 50th anniversary
in 1958 with a year-long Golden
Milestone celebration. Cadillac built its two-millionth car the same year
-- just eight years after reaching the one million mark.
GM History, 1970 - 1979
In the early 1970s, GM embarked on an unprecedented program to redesign
its entire lineup for better fuel economy. Weight and exterior size would
be reduced, vehicle interior room and comfort would be retained. Then-GM
Chairman Thomas A. Murphy called it "the most comprehensive, ambitious,
far-reaching, and costly program of its kind in the history of our
industry."
The first "downsized" cars were GMs 1977-model full-size autos -- about a
foot shorter and 700 pounds lighter than their predecessors. They proved
an instant hit and were followed by redesigned 1978-model intermediates,
1979-model personal luxury cars, 1980-model front-wheel drive compacts,
1981-model front-wheel drive subcompacts, 1982-model front wheel drive
mid-size models, and the U.S. industrys first compact truck. 1985 saw the
first front-wheel drive luxury cars roll
off the production line.
GM History, 1980 - 1989
As the 80s began, GM faced the challenges of modernization. Responding to
customers continuing demands for more fuel efficient vehicles at
reasonable prices, the company launched an unprecedented $40 billion,
five-year capital spending program to open the way for dramatic
technological progress throughout General Motors. Included were new auto
assembly plants in Orion Township, Michigan, Wentzville, Missouri and
Detroit/Hamtramck, Michigan, as well as a new Fort
Wayne, Indiana truck assembly center.
In addition, virtually all of GMs car lines were redesigned from body and
frame, rear wheel drive, to integral body, front-wheel drive designs in
order to reduce weight and improve fuel economy.
In 1981, General Motors Acceptance Corporation and Motors Insurance
Corporation, the Corporations finance and insurance operations, moved
their headquarters from New York to Detroit.
Later that year, a major realignment of GMs worldwide truck and bus
operations occurred. As a result, the truck and bus group took on complete
responsibility for the design, engineering, manufacturing, sales and
service of all General Motors trucks, buses and vans in North America and
throughout the world in an effort to improve efficiency and to enhance GMs
competitive position.
In 1982, General Motors entered into joint ventures with two Japanese
companies. The Corporation purchased $200 million of convertible
debentures from its Japanese affiliate, Isuzu Motors Limited, to assist in
financing the development of a new subcompact vehicle to be produced in
Japan and sold worldwide. And, in July, GM entered into an agreement with
Japans Fujitsu Fanuc Limited to design, manufacture, and sell robotic
systems. GMF Robotics Corporation. Shortly after
its formation, the Troy, Michigan, based company took steps to design and
build a new manufacturing and headquarters facility in Rochester Hills,
Michigan.
A major project involving GMs Buick Motor Division was announced in
January 1983. This effort involved a complete revamping of the car
assembly operations in Flint to produce all-new front-wheel-drive
automobiles for the 1986 model year. Referred to a "Buick City," the
concept also involves supplier firms and ultimately created nearly 5,000
jobs in the integrated complex.
In 1984, GM restructured its entire North American Passenger Car
Operations into two integrated car groups functioning as self-continued
business units. The long-standing Fisher Body and GM Assembly Divisions
were melded into the new groups. The two groups -- Chevrolet-Pontiac-GM of
Canada (C-P-C) and Buick-Oldsmobile-Cadillac (B-O-C) had complete
responsibility for engineering, manufacturing, assembly, and marketing for
their products. GM Chairman Roger B. Smith described the concept of
self-contained business units as "making the maximum use of every
resource, including every one of our people."
A new frontier in the U.S. automobile industry was forged in February
1984, when GM and Japans Toyota Motor Company formed a joint venture to
produce a new small car in Fremont, California, under the name of New
United Motor Manufacturing, Incorporated (NUMMI). The joint effort put its
first automobile on the market June 13, 1985, with the introduction of the
Chevrolet Nova.
In a merger completed October 18, 1984, the automaker acquired Electronic
Data Systems of Dallas, Texas. Operating as an independent consolidated
subsidiary, EDS, as a world leader in the computer services industry,
benefits GM by more effective control of computer services throughout GM.
In addition to EDS, GM acquired minority interests in several smaller,
high-tech companies in the vision robotics and artificial intelligence
fields. The goal: to further improve its technological
capabilities in these sophisticated fields.
In 1985, GM announced the addition of a new automotive operating unit Saturn - to its passenger car divisions, thus adding a sixth nameplate to
GM. Saturn Corporation is headquartered in Troy, Michigan. The car are
produced in a highly integrated plant at Spring Hill, Tennessee, 30 miles
south of Nashville. Saturn uses start-to-finish innovation to produce a
family of subcompacts to compete with Japanese imports while achieving an
unprecedented union-management
partnership in the development and manufacture of the Saturn project.
In mid-1985, GM diversified and expanded its knowledge in state of the art
aerospace technology when it purchased Hughes Aircraft Company, El
Segundo, California, for $5 billion in cash and securities.
From a strategic standpoint, this acquisition accelerated the rate of
application of electronics into GMs automotive products as well as
provided GM with access to world class systems engineering resources.
General Motors Chairman Roger B. Smith said the acquisition of Hughes,
along with EDS, gave GM "the basic building blocks we need to go forward.
To be able to have a lock on the intelligence and research that Hughes has
to help us with our future is just tremendous." GM
combined its Delco Electronics Division, AC Spark Plug Divisions
instrument and display systems business unit, and Delco Systems Operations
with Hughes to operate independently as a new subsidiary, GM Hughes
Electronics Corporation (GMHE).
In 1986, General Motors continued to lead industrial organizations
worldwide. During one of the automobile industrys most competitive years
ever, GM achieved record sales and revenues of $102.8 billion. GM faced
many challenges in 1986 and continued to do so into the 21st Century as it
confronted the challenges of foreign competition and a global economy.
To accomplish this, GM took a tough stand on cost reduction. The year 1986
saw plant closings, significant reduction of salaried employees worldwide,
the phasing out of noncompetitive or obsolete component manufacturing
operations, and the overall reduction of operating expenses. These
cost-reduction efforts, in conjunction with the opening of six new plants
in five years and tremendous investments in retooling and modernizing 12
other facilities, were designed to enhance stockholder value and make
General Motors a high-quality, cost-competitive company ready for the
challenges of the 21st
Century.
The results of GMs efforts began to payoff in 1987. GM introduced the
Chevrolet Corisca and Beretta, the Pontiac Bonneville, the ultra luxury
Cadillac Allante the GMC/Chevy full-size pickup trucks, and Oldsmobile
began production of the Quad 4 engine at the Delta Township Plant. The
company also offered a new six-year, 60,000-mile powertrain warranty, with
six year, 100,000-mile corrosion protection, showing GMs commitment to
produce high quality cars and trucks.
In 1987, General Motors earned net income of $3.6 billion on sales and
revenues of $101.8 billion. During the same year, GMs net income record
reflected earnings at each of its three subsidiaries -- General Motors
Acceptance Corporation (GMAC), Electronic Data Systems (EDS) and GM Hughes
Electronics (GMHE).
Also in 1987, GMs Sunraycer, a solar powered car designed and built by
various units of GM won the inaugural transcontinental World Solar
Challenge race in Australia, outdistancing its nearest competitor by more
than 600 miles. The flawless performance over the six-day trek was further
evidence of GMs ability to respond to the changing world of the automobile
industry.
GMs commitment to quality was very evident in 1987. GM executives and UAW
leaders formed the Quality Network, a joint effort for strategic
development of high quality, customer valued products. Also, GM
established the Targets for Excellence program. This new supplier
development/assessment program was formed to ensure continuous improvement
for its suppliers. Its aim was to evaluate and assist suppliers in five
key areas: quality, costs, delivery, management and
technology.
In October 1987, General Motors Corporation and the United Automobile
Workers (UAW) signed a historic three-year labor agreement that
underscored a new spirit of teamwork and human partnership between
management and labor. The agreement, reached without a work stoppage or
strike deadline, featured unprecedented job security provisions and the
establishment of joint study committees at GM plants around the country.
The on-going focus of these local joint
committees is to review operational competitiveness and to find ways to
improve quality and efficiency and thereby attract new work.
GM began 1988 with the largest single showing of GM technology in history
at the "Teamwork and Technology: For Today and Tomorrow" exhibit at the
Waldorf-Astoria Hotel in New York City. The show served as a report to the
nation on how GM was multiplying the power of its people and technology to
continue into the 21st Century as the number one producer of cars and
trucks in the world.
Also in 1988, GM introduced its newly redesigned mid-size cars, the Buick
Regal, Oldsmobile Cutlass Supreme, and the Pontiac Grand Prix. GM earned
record net income of $4.9 billion in 1988 on sales and revenues of $110.2
billion.
On February 6, 1989, General Motors Board of Directors declared a
two-for-one stock split on GMs $1-2/3 par value common stock, the first
time the common stock split since 1955.
In the face of a six percent decline in auto industry sales volumes in the
U.S., General Motors sales and revenues in 1989 increased to a record
$126.9 billion and earnings were the third highest in GMs 81-year history
despite a difficult sales environment.
Also in 1989, GM introduced the Chevrolet Lumina, the Corvette ZR-1
featuring a 32-value DOHC all-aluminum eight-cylinder engine and six-speed
manual transmission, and the Geo Storm and Prizm. GM also unveiled the
highly styled, all-purpose Pontiac Trans Sport and the Oldsmobile
Silhouette featuring the largest plastic panels ever put on any vehicle.
On the global front, GM purchased 50 percent of Saab Automobile AB of
Sweden to develop, manufacture and market Saab passenger cars worldwide.
During the Eighties, General Motors implemented more change--with new
plants, new technology, new products, a new commitment to cost efficiency,
and a new commitment to its people--than in all of the previous seven
decades of the Corporations history.
GM History, 1990 - 1996
As GM moved into the Nineties, it was apparent that economic
uncertainties, competitive pressures, intense global competition,
stringent fuel economy standards, tougher emissions standards, and a pace
of change more challenging than ever would affect all automobile
manufacturers.
In 1990, EDS had record revenues and profits, GM Hughes Electronics had
record revenues and GMAC posted its second best earnings ever. However,
even with these and many other accomplishments, the Corporation recorded
an overall loss for 1990. World events had a negative impact on the
automotive markets. Conflict in the Middle East, the plunge in consumer
confidence, and a U.S. recession all played major roles in increasing the
pressure on virtually every aspect of GMs business.
It became essential that GM improve performance, reduce costs and make GM
known as a company that cares most for its customers. To combat these
forces, GM changed its approach to design and manufacturing to eliminate
waste and began seeking new ways to bring products to the market faster.
Global competition became the name of the game.
In 1990, the Impact, an electric car prototype designed from the ground-up
for efficiency and high performance was introduced. Saturn Corporation,
also, introduced its all-new high-quality, high-value, fuel-efficient cars
to the public to compete against the imports in the small car market. GM
formed a single, powertrain focused organization, the GM Powertrain
Division, made up of the GM Engine Division and Hydra-matic Division to
improve customer satisfaction of powertrain systems. GM and Volga Auto
Works (VAZ), the leading vehicle manufacturer in the Soviet Union signed
agreements enabling GM to become the first American-based auto
manufacturer to establish a working relationship with the Soviet auto
industry. GM also announced it would build the "GM Pulsat Network" a
dealer satellite communications network to strengthen sales and service
effectiveness of GM dealers and better serve GM customers.
In 1991, the American automotive industry sustained losses unparalleled in
its history. The challenges facing GM were particularly acute in the
primary North American automotive market. GM accelerated fundamental
changes in the way GM did business. Plants were idled throughout North
American Operations, the salaried and hourly work force was reduced
through attrition and retirements, executive compensation was reduced and
many non-core assets were sold.
However, GM still introduced more new products in 1991 than any other
automaker in the world had introduce in a 12-month period (nine cars, six
trucks and five engines.) Customer satisfaction became an over-riding
concern. The 24-hour Roadside Assistance program was carried by every
division of GM, Bumper-to-Bumper Plus Warranty covered every part of every
GM car or light truck for three years or 36,000 miles, without a
deductible, and GMACs Smart Lease program was introduced to offer
customers the option of leasing the GM vehicle of their choice with
typically lower monthly payments.
The year of 1992 was known as the year of management changes at General
Motors. GM launched a major reorganization to streamline its business
practices and downsize its North American Operations (NAO). These changes
were essential to GMs vision of total customer satisfaction and the
restoration of profitability. GMs new structure led to more flexible
decision-making processes, more efficient utilization of technical and
capital resources, and increased management accountability for performance
to produce high-value, high-quality products and services.
The five business sectors became NAO Automotive, International Automotive,
Finance/Insurance, EDS, and GMHE -- each with its own Strategy Board to
push decision making down in the organization. The Chevrolet-Pontiac-GM of
Canada (C-P-C) and Buick-Oldsmobile-Cadillac (B-O-C) Groups were
eliminated and individual nameplates were restored. The GM Technical
Center consolidated five staffs into three becoming the NAO Technical
Center. GM formed a centralized
Vehicle Launch Center (VLC) with concentration on engineering and
technical resources. Engineers from the car and truck divisions were
joined by engineers from the Engineering Center and the Manufacturing
Center to work as a team to strategically plan and execute new products.
All component groups were consolidated into the GM Automotive Components
Group Worldwide (ACGW) becoming the largest supplier in the industry. Its
focus became global, those component
businesses that did not have growth or profit potential were closed or
sold.
Responding to the competitive realities of the marketplace, GM took the
necessary actions of rightsizing the Corporation for long-term health. The
objective for every portion of the restructuring was to minimize
disruption, eliminate redundancies, focus on value-added activity, and
improve the overall responsiveness of the organization while still
providing an effective safety net for displaced employees. A variety of
approaches were used to pare down the size of the work force.
Significant reductions were made in both the salaried and hourly work
forces. Salaried employees declined from 91,000 to 82,000 in 1992 with a
goal of 71,000 by 1994. Hourly employees declined from 274,000 to 272,000
by 1992. Also, the Central office staff was reduced from about 13,500 to
about 2,300 with many of the functions transferring to operating units.
In successful effort to regain lost market share, GM also launched the GM
Card MasterCard allowing users to build up annual credits of 5 percent or
more on each item charged toward the future purchase or lease of a new GM
vehicle.
Difficulties faced in the past few years were in a sense the overdue
wake-up call for General Motors. GMs success had made it easy to ignore
the significance of change and the signs of potential future problems, as
the corporations legendary leader, Alfred Sloan, warned it could happen
when he published his memoirs in 1963. The lesson is that for unrivaled
leaders, success itself breeds the roots of complacency, myopia and
ultimately, decline. Thats a generalized scenario, but
leaders in all kinds of industries and businesses had the same harsh
wake-up call in recent years.
1993 was a watershed year in GMs drive to return to profitability and
reassert industry leadership. Reflecting a major improvement in North
American Operations (NAO) as well as strong earnings from International
Automotive Operations, GMHE, EDS and GMAC, the corporation earned a total
of $2.5 billion representing an $11.1 billion turnaround in NAO from 1991:
a dramatic and gratifying turnaround after three straight years of
staggering losses.
The most urgent challenge was to reverse the financial losses from the
North American Operations. The objective for 1993 was for NAO to break
even. The NAO team exceeded that objective, achieving a net income of $427
million in the fourth quarter of 1993. The new target was to make NAO
profitable on a net income basis in 1994.
Intensified efforts in the areas of: customer focus, product quality,
global sourcing and advance purchasing; lean manufacturing; commonization
of processes, systems, and parts; and integration of global resources
yielded results in 1993.
NAO achievements included U.S. deliveries of more than 4.7 million cars
and trucks -- almost six percent over the 1992 calendar year and more than
one million units ahead of GMs closest competitor. 1993 was the best year
for GMC Truck with sales surpassing the 400,000 mark for the first time.
Saturns sales exceeded 225,000 units for the first time. Cadillac
continued its leadership of the luxury market for the 45th year with 1993
calendar-year sales again exceeding 200,000 units. Automotive Components
Groups (ACG) established manufacturing operations, customer service
offices or joint ventures in China, Japan, Europe and Australia. And, GM
and Toyota signed an unprecedented supply and sales agreement to sell GM
cars as Toyotas in Japan. GM will build right-hand drive Chevrolet
Cavaliers in the U.S. Toyota will purchase these models from GM and sell
them in Japan.
At the same time, GM made significant progress in closing the quality gap
with the best of the competition. The gap between GM and the best-in-class
competition has been cut to less than 0.4 problems-per-car and less than
0.5 problems-per-truck.
In 1994, GM recorded all-time record net income of $4.9 billion, and all
of GM's business sectors reported strong sales and earnings. Its success
was spread across all its business sectors and geographical operations;
North American Operations were profitable, and GM Europe was that region's
most profitable volume auto manufacturer.
EDS and Hughes Electronics also reported record earnings in 1994 and
strengthened their positions in fast-moving technologies of information
management and telecommunications. Hughes' launch of DIRECTV was the most
successful new product introduction in consumer electronics history.
Automotive Component Group Worldwide (ACGW) (now Delphi Automotive
Systems), became a separate business sector of the Corporation in 1994.
With sales of over $26 billion, and 190 operations and 17 technical
centers in 31 countries, it is the world's largest automotive systems
manufacturer. Growing rapidly, in the '90s, it has established
manufacturing operations, customer service offices and joint ventures in
China, Japan, Europe and Australia. It is now a supplier to virtually all
the world's automobile manufacturers, as well as a strategic partner to
GM's vehicle operations.
In 1994, evolutionary steps were taken to enhance NAO's ability to deliver
segment-defining vehicles, implement lean, common operating and business
systems, and continue progress in global intergration. The three NAO
passenger car platforms and Saturn were combined under two groups. The new
passenger car organizations became the Small Car Group made up of Saturn
Corporation and the Lansing Automotive Division, and the Midsize and
Luxury Car Group, composed of the Midsize Car Division and Cadillac Luxury
Car Division.
In 1995, General Motors continued emphasis on quality leadership, common
processes and systems, leveraging its global resources, achieving
competitiveness in cost, and introducing targeted products for specific
customer groups continued to pay off. GM reported record calendar-year
results demonstrating the solid progress it made toward achieving its goal
of consistent industry-leading financial results, even though the overall
worldwide industry was slightly weaker in 1995 than during the previous
year. Consolidated net income for the year was a record $6.9 billion
compared with $4.9 billion in 1994. Sales and revenues for the 1995
calendar year totaled $168.8 billion -- a 9.0 percent increase from 1994,
when revenues totaled $155.0 billion. General Motors dealers delivered a
total of 8.3 million units, maintaining GM's position as the number-one
vehicle producer worldwide for more than 60 consecutive years.
In 1996, General Motors began the year announcing that it would be the
first automaker in modern times to market specifically designed electric
vehicles to the public when its new EV1 passenger car is scheduled to go
on sale later in the year. General Motors also announced plans to market
an electric pick-up truck -- the Chevrolet S-10 -- nationwide in 1997 for
use in commercial fleets.
As computer technology begin to revolutionize marketing and advertising,
General Motors began an aggressive initiative to become No. 1 in marketing
cars and trucks on the Internet. GM unveiled gm.com on the World Wide Web
with a host of the latest Web technologies that provided an engaging
overview and seamless route to divisional car and truck production line
information as well as other services offered by GM subsidiaries. GM
provided over 16,000 pages of information
with 98,000-plus links to the world. Consumer response to the GM Web site
was so popular and overwhelming when it went on-line that the first day GM
had to increase its capacity by more than eight times its initial
capability.
Looking to the future, GM is in transition from a base of multinational
and regional operations to consolidated global strategies. Planning is
underway to coordinate many of the North American and International
vehicle platforms, the common structural systems which are the basis of
its cars and trucks.
With common engineering and manufacturing systems and common components,
GM will be able to offer a greater variety of vehicles tailored to needs
and tastes of customers in the various worldwide markets and build them
with lower costs.
As John F. Smith, Jr., GM chief executive officer and president stated,
"GM is changing its ways and will continue changing."