(Mt) – General Motors & Game Theory Discussion

Discussion 1 (Palakurla) How could GM use game theory to identify and assess the major risks to this decision? General Motors can identify all the players involved with this replacement. Potential players could be dealers, competitors, approving authority for new technology, technicians, financers, and the public. Be in the player shoes and think how they react. List all the possible risks from the players. Rank the risks. Assess the risks according to their scales and identify the major risks. Identify two major risks that would result from GM converting an existing line to an allelectric line. Employee Satisfaction Marketing Provide a brief discussion of each risk, and your assessment of the levels of inherent, current, and residual risk, using GM’s five point scale. Employee Satisfaction Existing employees are experienced with existing line. To convert to an all-electric line, new employees need to be hired, and existing employees may need to be trained or cut off, which leads to employee dissatisfaction. And electric line wouldn’t need so much assembly than a traditional line does. So the man power reduces affecting the job safety for employees. All the inherent, current and residual risks will be a “5” for this type of risk. I would say Residual to be a “5” as well because employees already faced a technology change so they will not be feeling safety with job when a new technology is coming up in near future. Marketing Not everyone would be a lover for electric vehicles. I could even say most of them can be a hater of electric cars. Safety is a biggest concern for public when buying goods. Everyone encourages the thought of an electric vehicle but not most of them actually ready to use it. Because of Range, slow charging time, no guarantee of batteries for a long trip, fire hazards, and many others; people are not yet ready to adopt the electric vehicles. So marketing and selling the motors is a biggest risk for current trend. Inherent and current risk scale will be a “4” for marketing. And the residual scale decreases to “3” and further down the lane in the years. Reference: Steven Loveday (2018). 11 Reasons People Don’t Buy Electric Cars (and Why They’re Wrong) Discussion 2 (Maroju) ERM at General Motors General Motors (GM), an American multinational corporation that designs, manufactures and distributes vehicles and its parts. GM is ranked among the leading automobile manufacturers world. Over the last two decades GM has lost a considerable amount of US market share based on vehicle sales. In 2017, GM announced that they are phasing out gas and diesel powered vehicles and introduce 20 new all-electric vehicles by 2023. This giant step will negatively impact United Auto Workers (UAW) and puts future auto jobs in risks. General Motors CEO Mary Barra plans to layoff nearly 14,000 jobs and shift the workforce to build more electric vehicles. This will create a battle with the UAW union and negatively impacts the business strategy (Shama & Wayland, 2019). Additionally, the electric cars are material risk to legacy automakers and investors (Moogal, 2018). The automakers have to spend more money than Tesla in building electric vehicle. If the company shifts to allelectric then it require fewer parts and less workers but it could take more than 30% of the market share (Shama & Wayland, 2019). References Shama, E., & Wayland, M. (2019, September 30). GM strike highlights how shift to electric cars puts future auto jobs at risk. Retrieved from https://www.cnbc.com/2019/09/30/gm-strike-highlights-how-shift-toelectric-cars-puts-future-auto-jobs-at-risk.html Moogal, F. (2018, November 27). GM May Finally Be Serious About Electric Vehicles. Retrieved from https://cleantechnica.com/2018/11/27/gm-mayfinally-be-serious-about-electric-vehicles/ Discussion 3 (Nelluri) GM CEO Mary Barra reported plans last November to eliminate up to 14,000 positions, wind down five plants in North America before the current year’s over and move the organization’s workforce and lineup to manufacture increasingly electric and independent vehicles. We are changing our workforce through salaried and official decreases as we move to an all-electric future.They told speculators in sketching out the organization’s new methodology in January. These activities are likewise helping us finance the race to lead in the EV and AV innovation improvement as automakers and tech organizations the same contend to open new and conceivably rewarding income streams through portability administrations. Somewhere in the range of 48,000 GM laborers are at present protesting as the UAW arranges another work contract that could spare a portion of those production lines from shutting down. Not exclusively is the business thinking about falling buyer interest for vehicles, its work day to EVs will likewise cost significantly more occupations. EVs are just simpler to fabricate and require less parts without a motor. The UAW expects the move away from gas motors could eliminate 35,000 positions throughout the following quite a while. That implies the association is basically consulting for new items that could in the long run mean less employments for its individuals. Inside ignition motors can require a huge number of parts while electric motors and drive trains just require a couple of hundred, as indicated by the investigation. Less parts mean less get together employments for laborers. The circumstance speaks to a cutting edge mystery in assembling. So as to make the occupations of things to come as UAW pioneers have alluded to them, GM and different automakers are relied upon to need to cut or change huge numbers of the ones that exist today. The new openings will probably pay more than those they supplant yet require more gifted laborers and extra preparing than conventional get together employments, something the association has said its individuals are willing and prepared to do. Electric vehicles are a material risk to heritage automakers. The gas vehicle market is incredibly all around created and focused. Edges are hard to get. GM accomplished a $2.5 billion benefit dependent on an edge of about 10% on its vehicles. While $2.5 billion appears to be an immense number, GM pays investors a critical profit, floating close to 25% of its normal benefits in a year. Portage’s is around 45%. Here’s an abnormal yet verifiable actuality,GM consumed more money in Q1 2018 than Tesla. GM detailed a balanced car free income of negative $3.464 billion. Tesla, which intellectuals were arranged to pronounce as a money consuming machine after Q1 2018, detailed free income of negative $785 million. I’m featuring this which is as it should be. Heritage automakers are having a troublesome time making a convincing electric vehicle that they profit on, and they need to spend fundamentally more cash than Tesla does just to hold their situation in the gas vehicle business, a business which is relied upon to decrease as electric vehicle deals increment. Rather, GM and each inheritance automaker has been constrained into a troublesome corner. Creating legitimate EV tech isn’t as simple as dropping a battery and electric engine into a vehicle and considering it daily, as Tesla has unmistakably indicated us. In 2010, it was evaluated that putting up another vehicle model for sale to the public costs an automaker around $1 billion to $6 billion. I can just accept a totally different engineering would be significantly more. Contribute an excessive amount of too early, inadvertently slaughter your gas vehicle business, and you’ll consume quite a lot of cash that the organization will fail inside a year or two. Contribute nearly nothing, and if the market movements to electric vehicles that you haven’t yet built up, your edges crash and you consume all your cash attempting to rapidly get up to speed and make a convincing, high-volume EV. Demand response (DR) can fill in as a viable instrument to more readily adjust the power request and supply in the shrewd matrix. It is characterized as the adjustments in power use by end-use clients from their typical utilization designs in light of valuing and motivator installments. This paper centers around new open doors for DR with electric vehicles (EVs). EVs are potential disseminated vitality assets that help both the network to-vehicle and vehicle-to-matrix modes. Their cooperation in the time-sensitive like time-of-utilization and motivating force based like guideline services. DR projects improves the security and lessen the potential dangers to the matrix. Shrewd planning of EV charging and releasing exercises likewise bolsters high entrance of renewables with unstable vitality age. This paper proposes a novel stochastic model from the Independent System Operator’s point of view for risk the executives and investment arranging of EVs in the savvy matrix for DR. The risk variables considered in this paper include those brought about by vulnerabilities in renewable, wind and sun oriented, load designs, stopping examples, and transmission lines’ unwavering quality. The adequacy of the model in light of different settings, for example, the zone type like private, business, and modern, the EV entrance level, and the risk level has been explored. References: Yen, L., Edington, M. P., McDonald, T., Hirschland, D., & Edington, D. W. (2001). Changes in health risks among the participants in the united auto workers—General Motors LifeSteps Health Promotion Program. American Journal of Health Promotion. Acharya, V. V., Schaefer, S., & Zhang, Y. (2015). Liquidity risk and correlation risk: A clinical study of the General Motors and Ford Downgrade of May 2005. The Quarterly Journal of Finance.

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