Q. 2 Failure and Stagnation GM-Fiat Alliance

Q. 2 Failure and Stagnation GM-Fiat Alliance

Failure and stagnation were evident in the GM-Fiat alliance. Failure camein the form of poor policies and ineffective work proposals. Stagnation meant that both GM and Fiat, individually and as a unit, had prolonged periods of no growth within the firms. The proposal for GM and Fiat to collaborate was destined from the outset to fail. The vehicle branch of the Italian firm Fiat has been losing money since the mid-1990s. Fiat and General Motors Corporation (GM) agreed to collaborate in 2000 (Brown, 2000). This was done in order to salvage Fiat’s faltering automobile division. As part of the arrangement, GM received a 20% stake in Fiat Auto while Fiat received a 5.1 percent stake in GM (Hakim, 2005). Fiat also had a four-year put option that allowed them to sell the balance of its ownership in the firm to GM. However, as Fiat’s losses increased in 2003 and the firm attempted to re-capitalize, GM’s stake in the company was reduced since it didn’t want to be a part of the process. When Fiat proposed to sell GM the remaining 90% of its Fiat Auto ownership if GM didn’t exercise its put option to acquire it in 2004, the two firms began to work against one other (Hakim, 2005). When sales fell short of expectations, GM got into problems since most of its expenditures were fixed, making cost cutting difficult. To put it another way, even while their income decreased, a significant portion of their expenses did not. Failure led to stagnation as both companies were unable to grow or to snap out of their losses streak.

Q.3 Root Cause Analysis of the Deadly Navy Collision

It’s possible that the two mishaps that occurred in the Western Pacific earlier this year involving Navy warships and commercial boats may have been avoided. They were brought on by fundamental navigational faults as well as errors made by the crews of both ships. It is a terrible tragedy that two separate shipwrecks in the Asia-Pacific region each claimed the lives of 17 members of the United States Navy (Schmitt, Gibbons-Neff, & Cooper, 2017). These mishaps were brought on by errors that could have been avoided in the first place, such as a lack of training, an excessive amount of confidence, and poor command decisions. The Commanding Officer made many of the decisions that led to this tragedy, and many of them were made because they didn’t think things through well enough. They were unprepared for the predicament they found themselves in because the commanders made bad judgements and did not properly educate the crew in navigation. As a result, they found themselves in an unsafe situation. The primary contributors to the accident were not following the rules, allowing oneself to get too comfortable, and being too confidence in one’s abilities (Schmitt, Gibbons-Neff, & Cooper, 2017). According to the findings of the root cause investigation conducted by the Navy, the crew and leadership on board did not make sufficient efforts to prepare for safety, follow adequate navigation protocols, complete basic watch routines, or react effectively when a crisis arose.


Brown, W. (2000). GM to Acquire 20% Stake in Fiat. Washington Post.

Hakim, D. (2005). GM Will Pay $2 Billion to Sever Ties to Fiat. New York Times, 14.

Schmitt, E., Gibbons-Neff, T., & Cooper, H. (2017). Navy collisions that killed 17 sailors were “Avoidable,” official inquiry says. Retrieved July, 10, 2019.