Even if product development and marketing issues are ignored, GM has 2 key issues to overcome. They are:
1. Labor prices are too high!
2. Executive compensation and gains are luxurious!
Actually GM’S labor costs have to be decreased so that they can be competitive too.
Direct manufacturing labor costs are the major cost for GM unlike other auto makers. As GM is giving much more for their direct labor than any other car makers in the world, they are not in a situation to offer their cars at an economical price and still make a profit.
Just think that a janitor is paid $35 dollars per hour and this pay scale cannot be maintained. In reality GM has no command over labor costs.
The present political situation will not permit another company to function a productive auto plant in the United States. This is the reason which GM should probably take into mind and they should not be allowed to fail. The fall of GM is as predictable as our looming social security bankruptcy.
The troubles at GM spotlight an exceedingly sad position for large companies who want to be competitive in America.
Source: Gruber Company