Reasons Why GM Failed

(MYFOX NATIONAL) - As automotive giant General Motors proceeds into bankruptcy and the company is reorganized, some are analyzing what went wrong and why GM failed.

Many agree that there were multiple factors that led the auto giant to bankruptcy. "If there was one decision that was the lynchpin ... it would be easier to fix," says Laura Marcero, a restructuring expert at Grant Thornton to USA Today . "But these are systemic problems pervasive in the industry for decades."

Some of the reasons for the failure.

* Hard-headed thinking at the top

Writing in Detroit's Metro Times Jack Lessenberry believes that the management of the company could not make the hard decision. "What's wrong, in a nutshell, is that it is a narrow, insular culture. Those who make it to the top of the heap, like Rick Wagoner, tend to be white Anglo-Saxon Protestant males who have worked at the same company their entire career, and have come up with the same set of buddies ... It is very hard to fire your old pals."

* Dropping the electric car program

One of management's bad decisions was not sticking with it's EV1 electric car program. The program began in the lates 1990s and the company had a lead on other car companies. They scrapped the idea and Toyota took the green mantle .

* Uncompetitive vehicles

Again Toyota was able to make cars that consumers wanted. Daily Finance writes that people were "willing to pay more for Toyota vehicles than for GM's since Toyotas were better designed and built so they had higher quality, cost less to own, and lasted longer."

Also though GM was late to the truck boom of the 1990s, once they committed to trucks, some say the company overracted. USA Today notes that as far back as 2000, "Wall Street was warning that GM could be overcommitted to trucks and wind up out of phase if the pendulum of buyer preference swung back to cars."

Reuters writes that "GM, which has posted $88 billion of losses since the start of 2005, has too many plants, too many workers and too many dealerships to be comfortable with a dramatic decline in sales."