General Motors: Leading US car maker emerges from bankruptcy

Introduction

This Case Study examines the factors that led to US auto giant GM's bankruptcy in 2009, describes its rescue plan, and assesses its effectiveness.

Scope of this research

MarketLine Case Studies describe topics such as innovative products, business models, and significant company acquisitions. Fact-based and presented in an accessible style, they explain the rationale of commercial decisions and illustrate wider market and economic trends.

Research and analysis highlights

GM entered Chapter 11 bankruptcy in June 2009, after several loss-making years.

GM had enjoyed US market share of nearly 50% in the 1950s and 1960s, but subsequently this was eroded by the rise of Asia-based automotive companies in the US market. GM also had major pension and healthcare commitments for its former employees, dating back to an era when such obligations were more affordable.

The recovery plan involved GM’s assets being purchased by the US and Canadian governments and auto workers unions, prior to an initial public offering in 2010 and the divestment of some brands.

Key reasons to purchase this research

What factors forced GM to enter Chapter 11 bankruptcy protection in 2009?

How did the company aim to restore its fortunes?