- Published: October 31, 2021
- Updated: October 31, 2021
- University / College: University of Guelph
- Level: Bachelor's Degree
- Language: English
- Downloads: 38
Article Review According to a CNN article, “GM recalls will mean smaller bonuses for factory workers”, by Wallace , General Motors decided to recall vehicles with defects. One of the defects included among others, ignition switches that had begun to cause automotive accidents. It indicates that before that decision, there was a non-disclosure of defects for a decade. This decision had to be difficult as well. It has led to the company having to fund the compensation program for the victims of accidents due to the flaws in the vehicles. From the article, the company also refunds those who had purchased the vehicles and had to return them. The number of cars recalled is staggering and the effect on profits substantial although not yet determined. The drop in profits will undoubtedly make for displeased employees since they had agreed to share profits, as opposed to base increases in their pay in previous negotiations. This is important especially since there had been a steady climb in their take home bonuses in recent years.
Information from this article is relevant to management because there reaches a time when organization and company management have to make the tough decisions. In most cases, such decisions are set to benefit the company or organization in the long term. Decision-making is an important part of managing any organization for it to be successful in the market. The fact that the author is a known reporter for CNN makes the article valid and reliable. The author provides information on the reasons for the recall and effects it would have to the company in terms of profits.
Despite the recall, the company has still managed to make 1.4 million dollars in third quarter profits. The article does not tell us whether this will have a cushioning effect on the company and workers or not. It also does not say whether the employees have job security worries in their future. It centers around the expected drop in profits for the company and the attendant effect on the employees, giving figures to support this argument. It is very informative on the costs of the recall, and the figures leave no doubt, on how grave the situation is. This must surely be the reason for the initial decision not to disclose the defects. The article describes what led to the recall and its immediate effects on the company. However, the article is scanty on other charges levied to the company by various statutory authorities for failure to recall cars despite being aware of defects. It is also scant on the attendant investigations being carried out which may even lead to criminal allegations being leveled against them. Lawsuits from customers who have either lost relatives or monetary value items are also likely to steepen the costs incurred by the vehicle manufacturer. The articles assertion is however valid. Given the snowballing losses facing the company, it is likely that the take home bonuses will be very low. He then takes us through the workers earnings in the recent years. By contrasting the two, we draw the conclusion that the headline is not, in fact, farfetched, but a possible reality. He continues informing and convincing readers so in few well packages facts. However, companies make tough decisions and changes that are set to benefit the company and result in profits and competitive advantage.
Wallace, G. (2014, OCtober 27). GM recalls will mean smaller bonuses for factory workers. CNN Money.