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San Diego State University General Motors Bail Out Case Study Discussion

San Diego State University General Motors Bail Out Case Study Discussion

Question Description

1. discuss the General Motors “Bail Out” Case Study, including:

– Why was it proposed

– What were some of the possible benefits of it

– What were some of the possible problems of it

– State and justify your own opinion as to whether it was appropriate or not.

information about the case study:

Case Study – General Motors Federal Bail Out (2008)

General Motors, one of the nation’s largest auto manufacturers, has been headquartered in Detroit, Michigan for 100 years. It is one of the biggest employers in Detroit and has manufacturing and sales outlets throughout the nation. It employs 200,000 Americans directly and many thousands more are employed in auto related businesses due to General Motors.

In 2008, during the last economic recession, General Motors was losing money so fast it stated that it would likely go out of business, thus eliminating hundreds of thousands of jobs in the U.S..

President Bush decided the loss of General Motors was too significant and offered to loan $50 billion to “bail-out” General Motors, as long as General Motors agreed to certain business changes that would make the company more efficient and profitable. General Motors and their employee unions agreed.

This program was also agreed to later by President Obama.


General Motors completely re-structured its company and became profitable once again. As of 2017, the Federal government had regained $39 billion of its $50 billion loan. The remaining $11 billion is considered a loss to the Federal government and will not be recovered.

Although very controversial at the time, the policy decision to bail out General Motors is considered by most economists, elected officials and Federal public administrators to have been successful and the right thing to do.


2. Describe what the “Reinventing Government” perspective means and why it is important and discuss/describe at least two of its eight basic principles as examples.

info about reinventing gov

Principals of Reinventing Government

Emphasize results rather than process

Simplify rules and empower administrators to use best judgment

Empower employees to have greater say in organization

Use “market-style” competition to get the best services at the lowest cost

Prevent problems through foresight

Focus on the needs of customers / citizens, rather than needs of the organization

Empower citizens to get involved and be a part of decisions/ solutions

8. Seek continuous innovation and improvement

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