The Gm Acquisition of Eds: A Clash of Organizational Cultures

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and discomfort which lowers an individual cooperation and commitment according to one research (Nargunde, 2013).

What has happened to Ross Perot since the end of the case?

According to David Remnick, in 1986, GM paid Perot $742.8 million to give up his stock, leave GM’s board of directors, and to shut his fiery mouth. For five years, Perot is prohibited from any attempts to take over EDS. Furthermore, Perot is forbidden to compete with EDS by starting a computer service for three years (Hitt, Ireland, & Hoskisson, 2008). In 1987 Perot gives $20 million to Steve Jobs to help with his new company, NeXT Corp (Baldwin, 2009). Perot Systems an information technology service provider is founded by Perot and a group of investors in 1988 (Baldwin, 2009). The Texas businessman, Ross Perot runs for the US Presidency in 1992 as an independent candidate winning approximately 19 percent of the popular vote and again in 1996 on the Reform Party platform winning 8 percent of the popular vote (Young, 2016; Baldwin, 2009).

Meanwhile 2009, Dell acquires Perot Systems for $3.9 billion (Pepitone, 2009). Today, Perot remains a philanthropist, donates to charities, and lives with his wife Margot in Texas.

What is the current financial position of G.M.?

As of April 28, 2017, General Motors Co. (NYSE: GM) publicized record first-quarter earnings and revenue powered by vigorous retail sales of its full-size trucks and crossovers in the United States. Also, constant growth of GM Financial and efficient cost performance around the globe.

First-quarter 2017 Records:

• Revenue of $41.2 billion, up 10.6 percent

• EBIT-adjusted of $3.4 billion, up 27.9 percent

• EBIT-adjusted margin of 8.2 percent, up 1.1 points

• EPS-diluted-adjusted of $1.70, up 34.9 percent

• North America EBIT-adjusted of $3.4 billion, up 48.8 percent

• North America revenue of $29.3 billion, up 10.7 percent

Records:

• GM Financial net revenue of $2.9 billion, up 38.7 percent

What is the current financial position of EDS?

Hewlett Packard announces in a new release it acquired EDS in 2008. EDS became an HP business unit and renamed EDS an HP Company. However, in 2009, it began calling itself HP Enterprise Services. The name change came one year after HP announced the acquisition. Hewlett Packard Enterprise (NYSE: HPE) announced financial results for its fiscal 2017 first quarter, ended January 31, 2017 (Marketwired, 2017).

HPE fiscal 2017 first quarter financial performance

Q1 FY17 Q1 FY16 Y/Y

GAAP net revenue ($B) $11.4 $12.7 (10%)

GAAP operating margin 4.1% 3.0% 1.1 pts.

GAAP net earnings ($B) $0.3 $0.3 flat

GAAP diluted net earnings per share $0.16 $0.15 7%

Non-GAAP operating margin 9.2% 8.1% 1.1 pts.

Non-GAAP net earnings ($B) $0.8 $0.7 6%

Non-GAAP diluted net earnings per share $0.45 $0.41 10%

Cash flow from operations ($B) ($1.5) ($0.1) ($1.4)

As related to Roger and Me?

What has happened to Roger Smith?

Roger Smith remained GM’s Chairperson and CEO until July 1990. Smith was a pioneer and tried to change the corporation, however, was unable to succeed. Smith was willing to take a risk, and his name relates to a few disasters, namely the GM-10 project. Smith is in the Michael Moore (1989) documentary Roger & Me (CBS, 2007). During his tenure, Smith was responsible for the Saturn plant built in Spring Hill, TN that produced Saturn brand, a notable accomplishment (LaReau, 2007). In 2007, Smith died after a brief illness; he was 82 (LaReau, 2007).

Why did Roger Smith refuse to go to Flint?

Smith knew many people had lost jobs in the Flint area. Reducing the workforce was a major issue dating back as early as 1979 before Smith took the helm. GM was restructuring its operations to meet the demand of the market, not to mention the quality problems with the Chevrolet and Oldsmobile engines that were tarnishing the GM name. Drastic changes had to come because GM was losing market share during these years and needed to produce vehicles that were fuel efficient (GM, n. d.). Smith knew people wanted answers and what he would have to say wasn’t going to make it any better for them. Things were more than likely going to get worst before getting better. In 1980, nearly all of GMs plants were either in noncompliance or flagged for potential noncompliance with EPA regulations (CBS, 2007; Carmody, 2016). GM closed almost all the plants in the Flint area, as it did its share in polluting the Flint River Shed (CBS, 2007).

I believe Smith said it as best as he could, “I cannot come to Flint.” The people in Flint felt powerless and would do anything to survive. Smith does not want to face those who lost their job due to the massive layoffs.

What/How/Does GM (or any large corporation) have a social responsibility to the town they are in (Flint, Michigan)?

Moore interviews Flint residents affected by the layoffs and feel GM has a social responsibility to the Flint area. Most residents blame GM for Flint losing out on the American dream. GM or any large company has a social responsibility to the communities in which they operate residents feel. But exactly, what is that responsibility? GM literally killed a town, displacing many of its workers, businesses were affected pushing them too close their doors and struggling to survive leaving some homeless. If one were to take a ride through Flint, it is devastating to see the destruction when the automaker left the area.

During this time, I was part of the community and employed with GM. Yes, many employees were laid-off with promises of being called back only to face another layoff. Many employees felt like a roaming gypsy because they were relocated to a different state to stay employed. I hired in 1978 before Smith took the wheel at GM. Little do most know GM was in trouble before Smith. Due to a changing the economy and pressure from Japanese competitors, GM had to downsize and restructure.