General Motors has filed for bankruptcy protection on June 1, seeking cash bailout from US federal government. General Motors tried to ward off bankruptcy and avoid government control, but in vain. The fall has been very hurtful as General Motors was the epitome of American capitalism and economic might. As General Motors filed for bankruptcy it went down American history as the third largest company to file for bankruptcy and the largest bankruptcy for the manufacturing sector. The company has gained time and protection from creditors as it filed for bankruptcy protection under Chapter 11. The bankruptcy plea has deeply affected 92,000 employees directly and over 5 lakh retired employees. Automotive analysts say that General Motors started loosing the plot of clever marketing when it started multi-branding strategy in the 80s. It also laid emphasis on manufacturi car finance calculator ng big cars and SUVs, to characterize America?s economic might. When the world changed drastically, General Motors was caught unawares. It was knocked off in a sudden and precise move. The combination of high labour costs, rising competition from asian car manufacturers, sky high fuel prices, freezing of credit, global economic meltdown, and lack of buyers, formed a lethal combination. Even as these reasons were visible on the surface, the problems ran deeper. Over the years, the GM workers have struck work and held protests demanding enhanced lifetime benefits. General Motors often agreed to workers demand. As such the cost of lifetime benefits pushed labour costs through the roof over a period of time. Prominent reports suggested that the company was paying US $ 1,500 per car it built for the lifetime benefit fund, for people who were no longer working for them.
