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Pension Management at General Motors  
Product Ref: 09/460C Company: General Motors Corporation

Product Type: Case Industry: Automobiles & Components

Related Product(s): Teaching Note
Authors: Yanling Guan   Zeba Khan
Established in 1908, General Motors ("GM") is a leading global automobile manufacturer. Though the company has maintained its global presence since 1931 and offers a vast range of brands, it is now considered a fading automotive manufacturing leader. GM witnessed a financial crisis in 1992 and successfully attempted to resuscitate its sales and earnings by implementing a revival plan. The success lasted for a decade, but the company observed fierce competition and declining global market share during this period. The company has since reported another loss in 2006. Dwindling sales figures, increasing competition and hefty staff costs are considered to be the key hurdles to GM's success. Furthermore, the introduction of a new pension accounting standard, the Statement of Financial Accounting Standards ("SFAS") No. 158, is expected to further deteriorate the financial performance of GM by recommending full recognition of pension surplus or deficit on the company's balance sheets. The management of GM is focusing on strategies to effectively manage the risks and returns of the pension schemes so that the new pension accounting standard does not adversely affect GM's financial performance.
Functional Area : Accounting & Control

Learning Objective: (1)To understand the impact of pension accounting standards on financial statements;(2)To illustrate the economic consequences of the new accounting standards;(3)To explore the different implications of disclosure and recognition in financial reporting.
Length: 15 pages Country: United States of America

Pub. Year: 2009 Level of Difficulty: 2
This product type is available in the following language(s):      English
Related Information: N/A
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