The Challenges GM Is Facing, and the Reasoning Behind Its Plant Closures
Harvard Business Review
NOVEMBER 30, 2018
Capital-intensive factories have a high-fixed-cost, low-variable-cost operating model. If you greatly reduce the production volume, the cars that do come out have to absorb more of the fixed costs, and that eventually sends the product into a profitability death spiral. These questions that doesn’t get asked enough.
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