General Motors Stakeholder Analysis
Introduction
General Motors recently announced that they will be idling five factories in North America. This will end up cutting around 14,000 jobs. This will save the company around six billion dollars per year by 2020. General Motors plans to use this money to invest in the future of the company. The landscape of the automotive industry is always changing. General Motors does not want to be left behind in all of the innovation that is currently taking place. General Motors has received a lot of backlash after this announcement and a few negative tweets from President Trump even knocked their share price down.
Stakeholder Stake (Interest, Right, Ownership) Attributes (Legitimacy, Power, Urgency) Responsibilities (Economic, Legal, Ethical, Philanthropic) Strategy (Collaborate, Involve, Defend, Monitor)
Employees Interest, Right Legitimacy, Urgency Legal, Ethical Collaborate
Customers Interests Power Ethical, Legal Monitor
Shareholders Interest, Ownership Power Economic, Legal Collaborate
Media Interest Urgency, Powerful Legal, Ethical Defend
Government Interest Legitimacy, Powerful, Urgency Legal Collaborate
Employees:
Stake: Interest & Right
General Motors plan to shut down five factories in North America will directly impact around 14,000 employees. Employees will either lose their jobs or be repositioned to other locations. Full time employees that will be displaced after this are not only interested in what General Motors will offer them, but they have a right to know. Many employees were offered severance packages and other benefits. Some employees accepted a buyout and will be paid for six months following their final day.
Attributes: Legitimacy, Power, & Urgency
This situation may require a lot of urgency for the employees. Employees will most likely be looking for new jobs after being laid off. It is common for employees to be upset or even angry with General Motors. Many employees have been loyal to General Motors and may feel betrayed by their decision. These employees that are upset have a lot of power over the reputation of the company. After workers from a General Motors plant in Oshawa, Canada were caught off guard with the announcement of the closure of their plant, workers walked out of work in protest. Unhappy workers can damage the reputation of the company as well as the production.
Responsibilities: Legal & Ethical
General Motors has legal and ethical responsibilities for their employees. After announcing that they will be cutting around 14,000 jobs, there are many steps that General Motors has to take to ensure that their employees will be able to find a new place of employment. For CEO Mary Barra, the decision to close five plants in North America was probably not an easy one. This had to be done however to ensure the future of the company. Because many jobs will be lost, Barra felt it was necessary to aid the employees that will end up displaced. Barra is offering positions to affected workers at other plants that will not be closing. General Motors will also be offering assistance in finding jobs for affected employees. They will also offer resume writing services as well as other career counseling for employees that will be displaced. This is very ethical of General Motors as it shows that they do value the financial health of their employees.
Strategy: Collaborate
To prevent any possible damage from their employees, General Motors must collaborate with them. General Motors has already offered many employees a buyout option to prevent potential damage. Many employees have accepted severance packages and are ready to move on. General Motors is providing lots of help for the employees that will be affected by the idling plants. Although it is impossible to please everyone, Mary Barra is doing the most she possibly can to prevent any damage.
Customers:
Stake: Interest
Customers are a big part of the success of a corporation. Without customers, there would be no revenue. Customers are very interested in the activities of a large corporation You see it all the time today. Many people refuse to eat Chick-fil-a food because of their leaderships position on same sex marriage. People may refuse to buy vehicles manufactured by General Motors because of these layoffs. General Motors must manage their public relations carefully in order to retain as many customers as possible.
Attributes: Power
Customers have a great deal of power over General Motors. The customers are the ones creating all the income for General Motors. If General Motors products begin to decline in quality or if the customers no longer hare the same beliefs as General Motors, customers could easily stop buying vehicles manufactured by General Motors and switch to a company like Ford Motor Company or Tesla.
Responsibilities: Ethical & Legal
General Motors must do whatever it can to keep the customers happy. To do this, they must continue to stand by their beliefs and decisions. I believe this strategy to close five plants will be good for the customers. By focusing mainly on their SUV models, they will be producing the models that the customers are purchasing the most. General Motors also has many legal obligations to their customers. They must ensure that their cars are street legal and adhere to government regulations. Vehicles must be equipped with various safety features and also adhere to emission laws.
Strategy: Monitor
The best strategy for General Motors to take with their customers is monitor them. General Motors is facing a lot of criticism and could be losing potential and current customers. They must see what their customers are doing and take the right steps to retain them. General Motors does not want to lose any customers so they must do whatever they can to maintain their loyalty.
Shareholders:
Stake: Interest & Ownership
Shareholders of General Motors have partial ownership of the company. Because of this ownership, they are very invested in the company and are interested in the performance of the company. This announcement raised the stock price of General Motors, but some tweets from President Trump lowered them slightly. As a shareholder, this announcement was exciting. Although this may not have excited employees, General Motors has more money to invest in innovation. With General Motors potentially saving six billion dollars a year, shareholders are excited to see how they will invest the money and create revenue. This move to close five plants in North America was the best move General Motors could have made for their shareholders. In the near future, General Motors will stop production of their least popular models. With all of their savings they can focus on becoming a leader in innovation in the ever-changing automotive industry.
Attributes: Power
Shareholders of any corporation want to see profits. Since they are giving money to the company, they would like to get some returns. If General Motors is unable to make a profit, investors could easily sell their stock and General Motors would end up losing some funds. With the five plants closing, it is a perfect time for shareholders to invest more in General Motors. General Motors current strategy will keep them relevant and competitive with more innovative companies like Tesla.
Responsibilities: Economic & Legal
General Motors has legal and economic obligations for their shareholders. They must try to maximize profits to ensure that shareholders get a return on their investments. It is not only a responsibility of General Motors, it is in their best interest to be profitable in order to keep the funds coming in. Without the support of shareholders, a corporation could crumble.
Strategy: Collaborate
The shareholders and the executives of General Motors should collaborate in order to ensure that all the negativity surrounding General Motors will disappear and not leav
e a lasting impression. This move to close five plans was the best move to make profit-wise. General Motors saw their stock increase after the announcement. The shareholders and executives must continue to collaborate to ensure that the stock continues to do well in today’s changing economy.
Media
Stake: Interest & Right
When it becomes known that a large company will be undergoing changes, media companies rush to get the information. The media has a great amount of interest in events concerning large corporations. It is the job of media companies to distribute the news the public. Along with their interest in events like these, they have a right to accurate information. It is General Motor’s responsibility to provide accurate information to the media outlets that are reporting on the event. It is also the responsibility of the media outlets to accurately report the information they are given. However, it does not always go that way.
Attributes: Urgent & Legitimate:
The media is very urgent when it comes gathering information from large corporations such as General Motors. When an announcement as big as this one occurs, the media wants to report on it as soon as possible. Not only that, but they begin to request information from General Motors as soon as possible. There are many legitimate news outlets that report news accurately that General Motors will happily share information with. There are however some news outlets that skew the information in order to slander General Motors or appeal to a different audience. While the media does not have much power over General Motors, they may have power over the people who read their news.
Responsibilities: Legal and Ethical
When it comes to giving information to the media, General Motors has an ethical obligation to give accurate information. While General Motors could easily deny requests for interviews and information, doing so would give them a negative appearance to the public. If they accept requests but give false information, they dig a deeper hole for themselves. It is important to report true and accurate information in order to evade slander. The media also has an ethical responsibility to report the information accurately. If the information is not reported accurately, the news sources risks losing their trustworthiness.
Strategy: Defend
There is always the possibility of news outlets attempting to skew the information they received in order to taint the reputation of a corporation. If that is the case, General Motors needs to be ready to defend themselves from said news outlets. It can be really dangerous if a news outlet is spreading false information. Since many people read the news and do not question it, if one news outlet is spreading false information, it is very easy for many people to believe it and move on. This could leave a lasting impression on people regarding General Motors.
Government:
Stake: Interest
In today’s current political state, the United States government isn’t very interested in globalism. Donald Trump’s slogan when running for the presidency was “Make America Great Again.†While many people have varying views regarding the slogan, one of the concepts that Trump was attempting to convey with it was nationalism. Although the term nationalism has a negative connotation, Trump uses this term for the promotion of creating jobs in America and supporting American companies and American made goods. Trump has a great amount of interest in the operations and management decisions of General Motors, an American Company. When the plant closings were announced, Trump went to twitter to express his outrage. General Motors creates many jobs for the United States, and these factory closings may contribute to the unemployment rate.
Attributes: Legitimacy, Power, & Urgency
The United States government is a very legitimate and powerful stakeholder. They also require urgency. After the announcement of the plant closings, Trump announced that the government was looking into cutting all General Motors subsidies. This shows how much power the United States government has over corporations. Since General Motors gets government funding, they must act quick in order to maintain their subsidies. Mary Barra must quickly come up with a plan to fix relations with the United States government.
Responsibilities: Legal
General Motors has many legal responsibilities for the United States government. From providing safe work environments for their employees to controlling the amount of greenhouse gasses produced by their factories, General Motors must comply with many government organizations and policies. While General Motors has placed some factories in China and Mexico, factories in the United States must comply with United States laws.
Strategy: Collaborate
With all the threats towards General Motors from Donald Trump, Mary Barra must act quickly and try to come up with a compromise. General Motors is only shutting down five plants in North America, only four are in the United States. While these plants shutting down will displace many workers, there will also be many jobs created in the future when General Motors begins creating new electric models. These jobs could be factory jobs as well as corporate jobs.
Conclusion:
While this move to idle five North American plants will not favor the employees that work in them, it is the best step the company could make for themselves. Today, corporations’ main goals are to make profit. This announcement immediately led to backlash from many workers and even the government. General Motors will be saving lots of money however by idling these plants. Savings of around six billion per year. With these savings, General Motors can focus on today’s trends of the automotive industry. Trends such as electric and autonomous vehicles. With all of this extra money General Motors can put into research and development, they will be able to become more competitive and prevent a fate of falling behind on trends. Overall this is the best move General Motors can make for the health of their company.