Description: Thanks a lot for that one! Several years ago, Canadian and US taxpayers bailed out General Motors (GM) during the financial crisis. But GM is back in the black and it is saying it needs to close its plant in Oshawa to retool for the future, leaving 2500 people in this city out of work. The impact is huge.
Date: November 30, 2018
1) Do you know anyone who will be impacted by the GM shutdown? How will this closure impact lives?
2) Did you know that in the financial crisis bailout the governments of Ontario, Canada and the United States all held an equity position in GM, though they all later sold their shares? Do you think that perhaps they should have maintained their equity positions in order to influence company policy? See https://www.cbc.ca/news/politics/general-motors-shares-conservative-government-sells-remaining-stake-in-automaker-1.3022822
3) In chapter seven of Wiley’s Managerial Accounting: Tools for Business Decision-Making, we learn a number of key concepts for decision making, such as relevant costs, sunk costs and opportunity cost. Discuss how GM executives may have employed these cost terms in making their restructuring decisions.