The Great Recession hit organizations in numerous industries hard, especially automakers like General Motors (NYSE:GM). But the future looks bright for GM, and as the global economy rebounds, this automaker is poised to cruise past its competitors in 2014.
To get a better idea about what the future holds for GM, let's take a look at how this automaker got to where it is today.
GM over the years
GM has raised the bar for automakers since its inception over 100 years ago, producing high-quality cars and trucks that still remain popular for motorists across the globe. In the late 2000s, however, GM was devastated by the economic downturn, which forced it to make tough financial decisions. During that time, GM battled bankruptcy, and cut back on the financial bonuses it once provided to employees.
Despite these financial challenges, GM sought solutions to recover quickly. GM instituted a profit-sharing plan that has paid immediate dividends, and this automaker posted a $3.8 billion profit in 2013. Meanwhile, the global economy has rebounded from the downturn of the late 2000s, which could help GM and other automakers boost their profits.
Last week, GM announced that it earned $913 million in the fourth quarter of 2013, a 2% year-over-year increase. In addition, GM's global vehicle sales rose 5 percent during the quarter.
While it's still early in 2014, this year has already been successful for GM. To help accelerate its growth, GM named Mary T. Barra as its new chief executive officer. In fact, GM showed it was serious about finding the right person to manage its everyday operations, as Barra will earn roughly $14.4 million this year, approximately 60% more than her predecessor Dan Akerson earned.
Barra could be the right person to help GM get on the fast track to a successful future. She has been with GM since 1980, and has helped the company in various capacities, including in design, engineering, program and quality assurance roles. As GM looks for ways to distinguish itself from competitors, Barra could be the right person to lead this company and help it overcome any possible hurdles along the way.
For example, Toyota is getting ready to unveil its first fuel-cell car. This model made its debut at the Consumer Electronics Show last month, and is scheduled to be released next year. While this car will cost more than other models, it could prove to be a popular choice among consumers searching for eco-friendly vehicles.
"It really provides all the benefits of a plug-in EV without the range anxiety and without the time it takes to recharge it," Bill Fay, group vice president of the Toyota division, told USA Today.
Meanwhile, Honda remains a global leader among automakers, which is reflected in some of its recent financial data. Honda's profits more than doubled between the third quarters of 2012 and 2013, and as it prepares to unveil state-of-the-art models soon, this automaker could watch its profits rise even further.
For GM, the highway to success is filled with challenges from rivals like Toyota and Honda, but GM has put itself in position to thrive. Behind Barra, GM has a plan in place to succeed for years to come.
Barra told Forbes that she hopes to build up GM's brand reputation over the next few years by winning every segment in which her company competes. In addition, GM will look for ways to lower its operating costs while bolstering its presence in China and other countries to optimize its profits.
Investors should not shy away from GM's stock. It may take some time, but GM is on its way over a rough patch and is likely to proceed on the highway to financial success in the foreseeable future.
Daniel Kobialka has no position in any stocks mentioned. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.