Carlos and Nissan: Managing Global Financial Risk

The financial industry had gone to several crises through the decades. Around 2008, Alex Preston notice that the investments banking industry was in a crisis. Big banks were closing its doors or selling out to other companies. As it was the case of the National City Corp.; the first ever American’s mortgage maker had to close its doors after taking a large amount of proprietary risk. Other big financial companies like Goldman Sachs and Morgan Stanley, to avoid having to go down the same way, became bank holding companies, which means that these companies could receive emergency federal funds.

General Motors, the “mother company” has faced many troubles in the past, and surfaced. A research by the National Research Council in the United States has revealed in 1992 that there had many impacts and future impacts in the automotive industry, indeed; it would affect the jobs and the internal economy. However, General Motors understood the threat potential that this and established strategic plans to revert the trend. Furthermore, whether General Motor Company was able to change the trend, and it saw the internal and external factors, prepared a strategic plan, Holden being the first brand in Australia, with at least just the 10 % of the population compared with the USA, the way to get a plan looks easier. In addition, it is easier to see a trend in countries with low population and good policymakers. In 2008 General Motors faced again the limit to bankruptcy. A fierce plan to develop and a new business association with FIAT made that GM avoid the dissolution. Even do all Europe have had a similar crisis( Boudette & Choudhury,

th century they had operations throughout 31 countries of the world. In 1978 Company had financial loss of US. $262.2 million .

When Knudstorp became the CEO, the company was with negative cash flow and the real risk o which would have even led to a breakup of the company.

General Motors is one of the world's most dominant automakers from 1931. After 1980s economic recession the main goal for automobile companies was cost reduction. Customers became more price-sensitive. Also Japanese competitors came into market with the new effective system of production. So market was highly competitive and directed toward price reduction. The case states that in 1991 GM suffered $ 4.5 billion losses and most part of the costs of manufacturing was due to purchased components. GM NA hired Lopez in order to find the way from "extraordinary" situation and reduce costs.

The company currently faces serious financial challenges. It was struggling with declining sales and increasing costs. Since 2004, revenues had fallen by more than 40% while costs especially for employees health insurance, maintenance, and utilities climbed. Credits and loans had been borrowed to

General Motors was the world’s largest automaker and, since 1931, the world’s sales leader. In 2001, GM had unit sales of 8.5 million vehicles and a 15.1% worldwide market share. Founded in 1908, GM had manufacturing operations in more than 30 countries, and its vehicles were sold in approximately 200 countries. In 2000, it generated earnings of $4.4 billion on sales of $184.6 billion. The company is trying to accurately calculate the risk of a potential devaluation to the ARS. In doing so the company had to decide between two options on how to proceed; was it worth the costs to increase the size of GM’s hedge position beyond the standard policy or should GM Argentina rely on other approaches to cope with the expected

Ghosn’s plan to combine, centralize, and globalize Nissan and Renault’s parts procurement would cut costs by 20 percent! Before this change, Ghosn estimated Nissan’s parts procurement costs were around 10 percent higher than Renault’s. To accomplish his goal, Ghosn had to prove that the precious keiretsu system of Japan was promoting

GM needed to find a way to protect its long sustained success in the domestic market, and build as a global player, which had everything to do with its strategy in developing foreign markets. Given the volatility of the Mexican economy, GM needed to seek international markets

However, in 2002 the announcement was made by Louis Schweitzer by then the CEO of Renault that Carlos would take the responsibility as the CEO for both Nissan and Renault. In spite of the critics which arose due the cultural differences which were seen as the biggest obstacle for him in managing both French

Along with other Japanese manufacturers, Nissan was successfully competing on quality, reliability and fuel efficiency. By 1991, Nissan was operating very profitably, producing four of the top ten cars in the world.Nissan management throughout the 1990s, however, had displayed a tendency to emphasize short term market share growth, rather than profitability or long-term strategic success. Nissan was very well known for its advanced engineering and technology, plant productivity, and quality management. During the previous decade, Nissan’s designs had not reflected customer opinion because they assumed that most customers preferred to buy good quality cars rather than stylish, innovative cars. Instead of reinvesting in new product designs as other competitors did, Nissan managers seemed content to continue to harvest the success of proven designs. They tended to put retained earnings into equity of other companies, often suppliers, and into real-estate investments, as part of the Japanese business custom of keiretsu investing. Through these equity stakes in other companies, Ghosn’s predecessors (and Japanese business leaders in general) believed that loyalty and cooperation were fostered between members of the value chain within their keiretsu.

Toyota has hit the headlines over the years over the defects in several of their models which has sent it on a public relations and safety campaigns relating to its vehicles. Notably is the Toyota safety campaign in North America for certain models of Toyota as well as Lexus brands concerning the floor mat entrapment of accelerator pedals, later on it extended to other models in November 2009.

This paper details each change undertaken by the organization by highlighting the different pressures identifying the problems the organization met and ultimately detailing the solutions that General Motors implemented.

Nissan functions using these two major components. Service and manufacturing organizations face many similar issues that affect the end result of the operation. For example, both face issues of cost control, and create mission statements and a vision for how the organization will be run and perceived by customers. They however their operations answer different questions and formulate different strategies when it comes to planning and managing the way in which an organization is run. The manufacturing operations at Nissan are in contrast to that of TPS, they leveraged a regional, decentralized supply chain structure, but still imposed a strong central control and coordination in times of global crises. Service wise they maintained a flexible organization by integrating and embracing diversity into their team. These two operations gives value to the customers and meets the organizations overall objective of customer

Nissan’s decision to build its second plant in the US came as a surprise to many industry players, especially considering the company was on the verge of