Founded in 1908, GM today employs about 327,000 people around the world. With global headquarters in Detroit, GM manufactures its cars and trucks in 33 countries. In 2005, 9.17 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn and Vauxhall. GM operates one of the world's leading finance companies, GMAC Financial Services, which offers automotive, residential and commercial financing and insurance. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services.

GM is the majority shareholder in GM Daewoo Auto & Technology Co. of South Korea, and has product, powertrain and purchasing collaborations with Suzuki Motor Corp. and Isuzu Motors Ltd. of Japan. GM also has advanced technology collaborations with DaimlerChrysler AG and BMW AG of Germany and Toyota Motor Corp. of Japan, and vehicle manufacturing ventures with several automakers around the world, including Toyota, Suzuki, Shanghai Automotive Industry Corp. of China, AVTOVAZ of Russia and Renault SA of France.

Genuine GM Parts and accessories are sold under the GM, GM Performance Parts, GM Goodwrench and ACDelco brands through GM Service and Parts Operations, which supplies GM dealerships and distributors worldwide. GM engines and transmissions are marketed through GM Powertrain.

GM's largest national market is the United States, followed by China, Canada, the United Kingdom and Germany.

On June 30, 2006, Kirk Kerkorian, whose Tracinda Corporation is the third-largest shareholder of General Motors, proposed a global alliance between GM and the Renault-Nissan group. Carlos Ghosn, the CEO of Renault and Nissan expressed interest to possibly acquiring a stake in GM, and include them in the successful Renault-Nissan partnership. It has been said that GM ordered an emergency board meeting to examine Kerkorian's proposal.

History

General Motors (GM) was founded in 1908 in Flint, Michigan, as a holding company for Buick, then controlled by William C. Durant, and acquired Oldsmobile later that year. The next year, Durant brought in Cadillac, Elmore, and Oakland. In 1909, General Motors acquired the Rapid Motor Vehicle Company of Pontiac, Michigan, the predecessor of GMC Truck. A Rapid became the first truck to conquer Pikes Peak in 1909.

GM surpassed Ford Motor Company in the 1920s thanks to the brilliant leadership of Alfred Sloan. While Ford kept inventing new ways to cut manufacturing costs, Sloan was inventing new ways of managing a complex worldwide organization, while paying special attention to consumer demands. Car buyers no longer wanted the cheapest and most basic model—they wanted style, power and prestige, which GM offered them. Thanks to consumer financing, easy monthly payments allowed far more people to buy GM cars—while Ford was moralistically opposed to credit. During the 1920s and 1930s, General Motors bought out the bus company Yellow Coach, helped create Greyhound bus lines, replaced intercity train transport with buses, and established subsidiary companies to buy out streetcar companies and replace the rail-based services with buses. GM formed United Cities Motor Transit in 1932.

General Motors bought the internal combustion engined railcar builder Electro-Motive Corporation and its engine supplier Winton Engine in 1930, renaming both as the General Motors Electro-Motive Division. Over the next twenty years, diesel-powered locomotives and trains — the majority built by GM — largely replaced other forms of traction on American railroads. (During World War II, these engines were also important in American submarines and destroyer escorts.) Electro-Motive was sold in early 2005.

At one point GM was the largest corporation ever in the United States, in terms of its revenues as a percent of GDP. In 1953 Charles Erwin Wilson, then GM president, was named by Eisenhower as Secretary of Defense. When he was asked during the hearings before the Senate Armed Services Committee if as secretary of defense he could make a decision adverse to the interests of General Motors, Wilson answered affirmatively but added that he could not conceive of such a situation "because for years I thought what was good for the country was good for General Motors and vice versa". Later this statement was often garbled when quoted, suggesting that Wilson had said simply, "What's good for General Motors is good for the country." At the time, GM was one of the largest employers in the world – only Soviet state industries employed more people. On December 31, 1955, General Motors became the first American corporation to make over one billion dollars in a year.

After GM's massive lay-offs hit Flint, Michigan, a strike began at the General Motors parts factory in Flint on June 5, 1998, which quickly spread to five other assembly plants and lasted seven weeks.

In 2000 GM sold a 6 percent stake to Fiat in return for a 20 percent share in the Italian automaker. As part of the deal Fiat was granted a put option which, if exercised between January 2004 and July 2009, would force GM to buy the company. GM agreed to the put option as it feared Fiat may be acquired by DaimlerChrysler and seriously challenge GM's Opel and Vauxhall marques. The relationship suffered due to Fiat's failure to improve its finances or market share. The relationship worsened in 2003 when Fiat recapitalised, reducing GM's stake to 10 percent. In February 2005 GM paid $2 billion USD (€1.55 billion) to buy itself out of the put option.

In the late 1990's, GM had regained market share; its stock had soared to over $80 a share by 2000. However, in 2001, a sequence of twelve contraversial interest rate hikes by the Federal Reserve to quell the stock market, combined with the September 11, 2001 attacks caused a severe pension and benefit fund crisis at GM and many other American companies and the value of their pension funds plummeted. In succesive moves, GM responded to the crisis by fully funding its pension fund; however, its Other Post Employment Benefits Fund (OPEB) became a serious issue resulting in downgrades to its bond rating in 2005. The company expressed its disagreement with these bond rating downgrades. In 2006, GM responded by successfully offering buyouts to hourly workers to reduce future liabilty; over 35,000 workers responded to the offer well exceeding the company's goal. GM has successfully gained higher rates of return on its benefit funds as a part of the solution. Thus far, GM has managed these economic difficulties which negatively impacted its share holder value, sales, and market share. . Moreover, the company is proving to be resilient as it implements its turnaround plan. Its financial difficulties have undervalued its stock. The stock has rebounded slighlty, as of June 28, 2006, GM's market capitalization is roughly $15.5 billion as shareholders express confidence in the turn around plans by GM's management. GM new products continue to score highly in the various quality surveys as they have for the past several years garning many top awards.

Nevertheless, since 2000, GM has remained the world's largest auto maker by ranked according to sales. After oil company mergers, GM's rank changed to the 5th largest company in the United States and the world in terms of sales.

On June 30, 2006 the media reported that General Motors convened an emergency board meeting to discuss a proposal by shareholder Kirk Kerkorian to form an alliance between GM and Renault-Nissan. The hastily arranged meeting suggests that GM's board is treating Kerkorian's proposal with urgency.

General Motors Hughes Electronics

GM Hughes Electronics was formed in 1985 when Hughes Aircraft was sold by the Howard Hughes Medical Institute to GM for $5 billion. GM merged Hughes Aircraft with its Delco Electronics unit to form GM Hughes Electronics (GMHE). This division was a major defense contractor, civilian space systems manufacturer and communications company. The defense business was sold to Raytheon in 1997 and the space and communications division was sold to Boeing in 2000.

Corporate structure and issues

Current members of the board of directors of General Motors are: Percy Barnevik, Erskine Bowles, John Bryan, Armando Codina, George Fisher, Karen Katen, Kent Kresa, Ellen Kullman, Philip Laskawy, Jerome York, Eckhard Pfeiffer, and Rick Wagoner (chairman). York was elected to the board on February 6, 2006 to represent Kirk Kerkorian, as E. Stanley O'Neal stepped down.

Rick Wagoner is also the chief executive officer of the company (since June 1, 2000), succeeding John F. Smith, Jr.

Environmental and social policies

General Motors was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine.

Due to its highly compensated workforce GM has the highest health care and labor costs in the industry, and some analysts have criticized the company for this.

Subsidies

In March 2005, the Government of Canada "gave C$200 million to General Motors for its Ontario plants, and last fall it awarded C$100 million to Ford Motor Co. to expand their Canadian auto production, provide jobs and contribute to the economy," according to Jim Harris. With additional subsidies promised to non-North American auto companies like Toyota, Premier Dalton McGuinty said the money the province and Ottawa are pledging for the project is well-spent. His government has committed C$400 million, including the latest Toyota package of C$125 million, to the province's automobile sector, which helped finance $5 billion worth of industry projects.

Marketing problems

Each of GM's automotive divisions were once each targeted to specific market segments and, despite some shared components, each distinguished itself from its stablemates with unique styling and (to some extent) technology. The shared components and common corporate management created substantial economies of scale, while the distinctions between the divisions created an orderly upgrade path, with an entry-level buyer starting out with a practical and economical Chevrolet and, (assuming progressive prosperity of the buyer), moving through offerings of the several divisions until the purchase of a Cadillac. The divisions were not competing with each other as much as passing along the same customer, who would thus always be buying a GM product, with the profits flowing to this single corporation.

The postwar industry became enamored with the concept of "planned obsolescence", implemented by both technical and styling innovations, with a three year product cycle typical within the industry. In this cycle, a new basic body shell is introduced and then modified for the next two years by minor styling changes. GM, Ford, and Chrysler competed vigorously in this new environment.

By 1958, the divisional distinctions began to blur, with the availability of high-performance engines in Chevrolets and Pontiacs, and the introduction of higher trim models such as the Chevrolet Impala and Pontiac Bonneville that were priced in line with some of Oldsmobile and Buick's offerings. By the time that Pontiac, Oldsmobile and Buick introduced similarly styled and priced compact models for 1961, the old "step-up" structure between the divisions was nearly over.

By the mid 1960s, most of GM's vehicles were built on a few common platforms and in the 1970s, began to use nearly identical body panel stampings, differing only in internal and external trim items. This was seen especially in the compact passenger vehicles offered by the divisions. Nonetheless, the 1960-75 period was perhaps the greatest in GM's history, as it eventually held slightly over 50% of the U.S. market.

The subcompact Chevrolet Vega, introduced for the 1971 model year damaged GM's reputation more than perhaps any other vehicle in its history. Plagued by rust problems and an aluminum engine that was prone to failure at low mileage, the car was not designed and built to the standards consumers expected from GM.

By the 1980's, GM frequently "rebadged" one division's successful vehicle into several models across the divisions, all positioned close to one another in the market place. Thus, a new GM model's main competition might be another model spawned off the same platform. This led to so-called market "cannibalization", where GM's respective divisions spent time stealing sales from one another, while other more co-ordinated efforts (notably from the Japanese manufacturers) were allowed to increase their market penetration. For instance, the company's GMT360 mid-sized light truck platform has, since its inception in 2002, spawned the basic Chevrolet Trailblazer, an extended version of the Trailblazer, the Oldsmobile Bravada, the GMC Envoy, the Envoy XUV (an extended Envoy with a reconfigurable tailgate) and later, the Isuzu Ascender, Buick Rainier, and Saab 9-7X. Though each model had a more or less unique mission, without custom engine choices or radically different suspension settings and trim choices, the cars can hardly be told apart.

Critics have suggested that this progressive blurring of well-defined brands has been a large contributor the late 20^th and early 21^st century market failures of GM.

During the 1980's and later GM divisions had market issues concerning quality - not that the vehicles produced had appreciably declined in quality but rather that they did not compare well to foreign competition in matters of fit and finish, durability of sheet metal, paint (which was not at all durable for several years after a formulation change), and plastic components. The plastic and paint problems were not immediately apparent, and their effect was to enforce negative perceptions of vehicle quality long after the problems had been corrected, as the defective vehicles severely deteriorated in appearance as they aged, with blistering paint, rusting exteriors, brittle and breaking flexible bumper fillers, and clouding headlight covers (the latter also a problem with Ford and Volvo products).

In 2004, GM redirected resources from the development of new sedans to an accelerated refurbishment of their light trucks and SUVs for introduction as 2007 models in early 2006. Shortly after this decision, fuel prices increased by over 50% and this in turn affected both the trade-in value of used vehicles and the perceived desirability of new offerings in these market segments. The current marketing plan is currently to extensively tout these revised vehicles as offering the best fuel economies in their class (of vehicle), although such advantages are expected to be minor until the introduction of new hybrid light trucks in 2007, with projected 25% mileage improvements. In contrast, Ford, GM's primary domestic competitor, has emphasized building more and better passenger cars with attractive styling, features, and quality, with profitability flowing from lower production costs through reduction of excess plant capacity and firm consumer demand, which enables avoidance of marketing incentives (such as low or zero interest, cash back, or free or low cost added accessory, appearance, and other packages). When the new models were released in early 2006, they were well received, with strong sales. An increase in fuel prices in the spring of 2006 continues to trouble both GM and Ford.

In the summer of 2005 GM announced that effective immediately, its corporate chrome emblem "Mark of Excellence" will begin appearing on all recently introduced and all-new 2006 model vehicles produced and sold in North America. The move is seen as an attempt by GM to link its name and vehicle brands more closely. The company's vehicle brands include Chevrolet, Pontiac, Buick, GMC, Cadillac, Saab, Hummer and Saturn.

And continuing for months afterward, GM promoted sales through an employee discount to all buyers. Marketed as the lowest possible price, GM cleared an inventory buildup of 2005 models to make way for its 2006 lineup. While the promotion was a temporary shot in the arm for sales, it did not help the company's bottom line.

GM in China

General Motors is the top-selling foreign auto maker in China, with 11.2% of the total market there. The Buick brand is especially strong, led by the Buick Excelle subcompact. Cadillac initiated sales in China in 2004, starting with imports. GM pushed the Chevrolet brand there in 2005 as well, transferring the formerly-Buick Sail to that marque. The company manufactures most of its China-market vehicles locally, through its Shanghai GM joint venture. The SAIC-GM-Wuling Automobile joint-venture is also successful selling trucks and vans under the Wuling marque.