US car giants seek $21bn funding

The numbers keep going up!

GM and Chrysler are asking for more money from the US Government again. Read this BBC article and answer the following questions:


Level 1: Knowledge
1a) Complete this statement:
The loans that GM is asking for are classed as an __________source of finance because they will provided by stakeholders outside of the business. According to the article, they may also be classed as a __________ term source of finance, because they are expected to be paid in 8 years (2017).

1b) What is working capital? Why is it important to a business?

Level 2: Application
2a) Construct a table describing the plans outlined by both GM and Chrysler.
2b) Explain how Chryslers debt management plan will impact its working capital.

Level 3: Analysis
3) Using the information in the article , analyse the likely impact on key financial statements for either car company.

Level 4: Evaluation
Justify your choice of 1 additional source of finance for either car company.

Stuck? Click here for some ideas!

Note Level 1 – Level 4 are questions based on IB standards where

Level 1: Knowledge
Level 2: Application
Level 3: Analysis
Level 4: Evaluation

Words in bold (define, explain…) have a specific meaning in the IB Diploma Program (DP). The meanings are in Glossary of Command Terms Section of the IBO DP Business and Management Guide available at the OCC and from my website

US car bail-out fails in Senate

And the story still goes on!

This BBC article has the latest information on the story about US car makers trying to get US Government loans to help them survive the current financial crisis.

Read the article, and answer the questions that follow:


Level 1 - Knowledge
1) Define the term ‘Special Interest Group”

Level 2 - Application
2) Contrast the objectives of the United Auto Workers (UAW) with those of the US Government.

Level 3 - Analysis
3) Explain how the failure to reach an agreement on a loan to US car makers caused a fall in the Japanese stock market.

Level 4 - Evaluation
4) Based on what you know about this case, recommend whether or not the US senate should agree to a loan to the US car makers

Note Level 1 – Level 4 are questions based on IB standards where

• Level 1: Knowledge
• Level 2: Application
• Level 3: Analysis
• Level 4: Evaluation

Words in bold (define, explain…) have a specific meaning in the IB Diploma Program (DP). The meanings are in Glossary of Command Terms Section of the IBO DP Business and Management Guide available at the OCC and from my website

US in new push for auto bailout

This BBC article has the latest information on the ongoing saga of the US car manufactures current financial troubles.

a) What external environmental factors are mentioned in this article?
b) To what extent are these external factors likely to influcence the US Government in its decisions.

US carmakers publish rescue plans

This article from the BBC is the latest on the problems faced by the big US car makers.

You may need to read the previous articlec on this saga to remind yourself of some important information before answering the following questions.


Level 1 - Knowledge
1a) How much money were the US car makers asking for in the previous article on this situation? How much are they asking for now?
1b) What sort of merger might Chrysler be forced to accept?

Level 2 - Application
2a) Explain the strategies that the 3 US car manufactures plan to action in order to rescue their businesses.
2b) Explain this statement in this article - “Most analysts think that GM is "too big to fail"”

Level 4 - Evaluation
4a) Based on what you know about this case (from this and from previous articles, to what advise the US congress on whether or nor to agree to the US car makers request for finance.
4b) Ford currently owns Volvo (a Swedish based car manufacturer) . Justify Fords plans to sell this part of their business right now?

Note Level 1 – Level 4 are questions based on IB standards where

• Level 1: Knowledge
• Level 2: Application
• Level 3: Analysis
• Level 4: Evaluation

Words in bold (define, explain…) have a specific meaning in the IB Diploma Program (DP). The meanings are in Glossary of Command Terms Section of the IBO DP Business and Management Guide available at the OCC and from

my website

US car companies seek $25bn aid

This BBC article describes how the US Governments is being asked to put money into the 3 largest car makers in the USA.

Level 1: Knowledge
1) Define the term GDP mentioned in the article. By how much does Mr Waggoner (GM chief executive) believe that GDP will fall if the car makers do not get the financial help they are asking for?

Level 2: Application
2) Explain why Mr Waggoner (GM chief executive) said that the $25 billion aid is needed because
"It's about saving the US economy from a catastrophic collapse," he said.

Level 3: Analysis
3) Examine the political forces for and against the US Car manufacturers in their request for $25 billion aid

Level 4: Evaluation
4) To what extent are the problems faced by US car makers of their own making

Note: This article contains useful information to answer these questions

Note: Level 1 – Level 4 are questions based on IB standards where

• Level 1: Knowledge
• Level 2: Application
• Level 3: Analysis
• Level 4: Evaluation

Words in bold (define, explain…) have a specific meaning in the IB Diploma Program (DP). The meanings are in Glossary of Command Terms Section of the IBO DP Business and Management Guide available at the OCC and from my website