Toyota vs GM( situation during the crisis 2008) Research Paper

Toyota vs GM( situation during the crisis 2008) - Research Paper Example The motor vehicle industry in the US was particularly hard hit by the economic meltdown to an extent that some automobile giants had to be bailed out financially to rescue them. Even if Toyota’s performance was also affected by the economic crunch, the relative better performance against General Motors’s was contributed by Toyota’s manufacturing policy adopted at the company level. Popularly known as the Toyota Production System (TPS), the workforce is motivated to work and contribute actively to the maximization of output and innovation. There is a good tradition at the Toyota production plants concerning industrial elations characterized by the harmonious management of the same. Toyota has been able to successfully handle the pressure of exerted by radical unions and facilitated favorable enterprise unions. According to Bunkley and Vlasic (1), the motor vehicle industry’s performance in 2008 was the worst since 1993 as under a million units only were sold in the US alone. Perhaps, this explains why the General Motors’s performance declined. Toyotas’ performance went down by twenty four per cent while General Motors’s sales decline was by about sixteen percent in 2008. General Motors’s flop translated to losses amounting to over fifteen billion US$ while Toyota’s loss was about a third of General Motors’s failure. The performance dwindling at Toyota was the worst drop in the last two decades, and losses the worst in its entire 72 years of existence, even if it was relatively a better performance than that achieved by General Motors The differential performance by the two motor vehicle companies can be said to be largely as a result of forces beyond management control. Global economic performance was the major factor that poor sales in the motor industry can be attributed to (Wad, 9). At the corporation management level, there was little intervention that could have been adopted