ipl-logo

General Motors Bailout: A Case Study

994 Words4 Pages

General Motors is a multinational company that makes and sells vehicles and its parts. In 2009 General Motors had some financial problems. The automotive company had difficulties with their finances, as a result, the company was not profitable and was leaning towards bankruptcy. The company then reached out to the government for money to help with their situation. The Bush-led government decided to use $49.5 billion of taxpayers’ money to help General Motors out. Was this the right choice for the government?
General Motor’s debt was converted into preferred and common stock that was owned by the government. The stocks were then offered to the public (Contorno, 2015). General Motors’ bailout cost taxpayers more than $11.2 billion; this included a $826-million write-off in March from government investments in the “Old GM” before the company’s bankruptcy …show more content…

The A stands for assess and it answers the question, what is the problem? The problem here is whether the government should bail out General Motors or not. B stands for brainstorm; what are the choices or solutions? The two choices would be to bail them out or not to bail them out. C stands for consequences- both positive and negative. The consequences would be the ones listed above. The consequences on taxpayers, government, employees and General Motors. D is for decide- a decision is made, and an action plan is put in place.
If I was the CEO of General Motors, my decision would be to accept the bailout. This decision would be made because General Motors would be able to still to open its doors to customers. The bailout would allow the business to continue and grow; which it did. The GMC Sierra is the seventeenth best-selling car in America (Zhang, 2017). It’s not always about the present, sometimes it’s beneficial to take risks and think long-term instead of only

Show More
Related

The FDIC: The Great Depression

245 Words | 1 Pages

The FDIC was created in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s. The FDIC was a provision of the Glass-Steagall Act. During the nine year period from 1921-1929 more than 600 banks failed each year. The failed banks were small banks operating in the rural suburban areas and held the deposits of mostly farmers and blue collar folks. When banks fold and continue to do so, people will start to worry about their money in any bank.

Read More

James Black Abc Childcare Scandal

853 Words | 4 Pages

The impact of this collapse affected many people and these included the people who purchased shares for the company, the people who worked for the company and the parents who sent their kids to the child care centres. The effect on the parents who sent their kids to these ABC child care centres was that they would have to find their children another child care centre to attend which isn’t easy because a lot of child care centres are heavily booked and it is hard to get places for their children. The people who had purchased shares in the company would have been happy when the share price increase due to big increases in the company’s net profit. They then would have been really shocked when the share price decreased asking the questions how

Read More

Comparing The Two Primary Mandates Of The Federal Reserve

401 Words | 2 Pages

[4] Aid will not be provided to a firm hasn’t paid its debt in the past 3 months. [4] The Federal Reserve can’t provide loans to individual financial institutions; “Under the rule, the Fed can make emergency loans that can potentially be used by at least five companies…” [5] There must be “…explicit justification for broad-based bailouts.”

Read More

American Reinvestment And Recovery Act: A Case Study

107 Words | 1 Pages

The American Reinvestment and Recovery Act laid out the groundwork for a program designed to equip hospitals and medical practices around the country with electronic health record systems by providing financial incentives (p. 245). However, in some markets such as long-term care facilities the transition to electronic system has been slow. Professional nurses whose careers are in long-term care in our nation will play major role in getting electronic health systems into these settings. It will take nurse advocating for these systems and continuation of research showing evidence that supports widespread adaptation of these systems, but nurse united under one cause, best practice can make anything happen.

Read More

Why Is Herbert Hoover A Bad President

1069 Words | 5 Pages

The company's stock would go down more and more because the company would lose money. Therefore, people would lose money and they would lose their homes and jobs. Also, bank failures happened and innocent people would lose money if they put their money in that bank. A lot of people became homeless because of this scenario. The Stock Market Crash had a significant impact on how Herbert Hoover’s presidency played out.

Read More

State Street Crash Case Study

116 Words | 1 Pages

A crash at a busy West Lafayette intersection closed a portion of U.S. 231. It happened Wednesday night just after 9 p.m. at the intersection of U.S. 231 and State Street. According to Purdue Police Lt. Kang, a white passenger car traveling south on U.S. 231 failed to yield while turning right onto State Street. The driver of a blue passenger car traveling north on U.S. 231 collided with the white car spinning it around.

Read More

The Story Of Angelo Mozilo And Countrywide Financial

915 Words | 4 Pages

Angelo Mozilo and Countrywide Financial are not household names by any means. The story behind them played a huge role in our country's economic and housing history. The company went from nothing to worth over a billion dollars in a 40 year span. Countrywide Financial would play a role in the housing crash in 2008. Angelo Mozilo made quite the name for himself coming from a poor Italian family in the Bronx.

Read More

The New Deal Dbq

1037 Words | 5 Pages

During Franklin Delano Roosevelt’s First Inaugural Address in March of 1933, he stated, “...the only thing that we have to fear is fear itself…” (Text 1, line 2). Roosevelt said this to the people of the United States during The Great Depression to bring a spark of hope into their minds. During the time of The Great Depression, people had lost everything, and they were scared that the depression wouldn't end. The people lived in Hoovervilles and were starving to death, with few possessions.

Read More

Capital Finance Case Study: Bankruptcy

1309 Words | 6 Pages

Bankruptcy is a time of turmoil and uncertainty in any company, in addition to employees leaving and a loss of confidence from vendors and customers, management is restricted in their ability to make decisions and navigate the company. Because of the heightened uncertainty, many investors abandon the company, greatly reducing the value of the company, making the process even more difficult. However, savvy investors can generate large returns by entering the company at the right time as it begins to rebuild, so long as they can determine which companies will fail, and which will recover. H Partners is currently engaged in this process with Six Flags, having already gathered substantial returns on Six Flags’ senior debt, H Partners is determining

Read More

Personal Narrative: Why The United States Government Failed

548 Words | 3 Pages

The Reason the United States Government Has Failed its People It is now January 3rd, 1931, and I have been unemployed and homeless for over a year now living on the streets of Chicago. About ten years ago, I started working in a factory that created underarm deodorant. Around a year and a half ago, my wage was decreased. Eventually I was fired.

Read More

Financial Case Review: The AIG Scandal 2005

703 Words | 3 Pages

The AIG Scandal 2005 started when AIG management was issuing a press release describing its third quarter earnings in 2000 to the public. The report showed that the premium of AIG was significantly increasing, while its loss reserves was decreasing by $59 million. However, according to many industry analysts, along with the positive earnings, AIG in fact should show an increase in its loss reserves as well. This caused the investors of AIG suspected that AIG was drawing down its loss reserves to boost its profits. The suspicious of the investors has unfortunately led to the falling of AIG stock price from $99.60 to $93.30 on New York Stock Exchange (NYSE).

Read More

Gordon Gekko Greed Is Good Quotes

1324 Words | 6 Pages

1. Gordon Gekko is released from prison after serving eight years in prison for insider trading and mail fraud. Gordon Gekko 's daughter Winne is in a relationship with Jacob Moore who is trying to raise money for a Fusion research project. Jacob who is known as Jake in the film is working for a financial institution called Keller Zabel and is the protégé of the managing director, Louis Zabel. Later on we find out that the companies stocks have started to crash and Zabel commits suicide.

Read More

Case Study Fannie Mae

439 Words | 2 Pages

An Insight into Fannie Mae For many families in the United States who are looking to buy a new home, there are always many things to consider. Money is one of the largest factors, and it can be very hard for lower, moderate, or middle class families to afford the cost and mortgages of the house they want. That is when Fannie Mae will step in to help them out. Fannie Mae has been around since the New Deal was passed in 1938. They are set up to expand the secondary mortgage market in the United States by securing mortgages with mortgage-backed securities.

Read More

General Motors History Essay

340 Words | 2 Pages

History of General Motors General Motors (GM) was created in 1908 in Michigan by Williams C. Durant as a holding company after a 15 year contract with the McLaughlin’s of Canada. At the time of GM’s inception, only Buick Motor Company was a brand of the company. However, GM rapidly grew after the acquisition of brands like Oldsmobile, Cadillac, and Pontiac. All together, GM acquired more than twenty companies (GM, 2015). GM headquarters was located in Flint, Michigan until the mid-1920s when it was moved to Detroit, Michigan.

Read More

Is The Government Ethical Or Morally Wrong?

622 Words | 3 Pages

I believe the government has done the right thing by aiding GM with tax-payers money to a private company because it beneficial to the majority such as the blue-collar workers. If the government hasn’t helped, the unemployment will soar in places such as Michigan and further down costs more harm economically in the long run. The government has not only helped one of the oldest but largest company in the US but they also saved

Read More

More about General Motors Bailout: A Case Study

Related Topics

Open Document