Though large businesses have managed to stay afloat in recent years in an unstable economic climate, this does not mean that they are impervious to the ups and downs of stocks, market crashes and other factors that may come into play. Here are a few companies whose empires have fallen and/or closed for good:
#1. Lehman Brothers
In 2003, well-known investment firm Lehman Brothers got into mortgage debt as part of their financial strategy. In 5 years’ time, they had incurred losses, failed to secure a government loan to stay alive and owed $613 billion in debt.
The combination of these factors caused the company to declare bankruptcy and fold in September of 2008. Unfortunately, their collapse caused the global economical crisis during the latter part of 2008. The Lehman Brothers’ filing for bankruptcy was the largest in the history of corporate America.
#2 General Motors
Subsequently, during the global economic meltdown, General Motors ( Chevrolet, Buick, GMC, Cadillac, Baojun, Holden, Isuzu, Jie Fang, Opel, Vauxhall) was one of many companies that also suffered from this crisis. Sales suffered drastically, as people tightened belts on spending.
Seriously, who would even consider purchasing a car worth $23k-$60k in the middle of an economic crunch? They even closed several brands like Pontiac, Saab, Hummer, and Saturn. But unlike the Lehman Brothers, they were able to secure a government loan, as the government wanted to save the industry’s jobs. Thankfully, in 2010, GM returned to profitability.
P.S. – General Motors was the company for supplying automobiles for Michael Bay’s Transformers movie trilogy.
In 1994, the retail store closed 110 stores after failing to invest in computer technology to manage their supply chain while competitors Walmart and Target were able to do so.
In 2002, they filed for bankruptcy due to the corruption of then chairman and president Chuck Conway and Mark Schwartz, respectively, amassing personal fortunes while fooling stockholders that the company was doing relatively fine. Kmart dismissed both Conway and Schwartz, closed 300 more stores, and laid off 34,000 employees. After a series of mergers and acquisitions in the following years, they seem relatively fine.
#4 Carrian Group
Headed by George Tan, this was once one of Hong Kong’s largest conglomerates with businesses such as real estate, finance, shipping, hotels, and a formidable taxi fleet.
A scandal involving Bumiputra Malay Finance (based in HK) and Bank Bumiputra Malaysia Berhad (of Malaysia) led to reports of account fraud, a bank auditor’s murder, and a suicide of a finance advisor. The conglomerate shut down in 1983 and is considered the largest bankruptcy in HK.
#5 BlackBerry Limited
Years ago, it was predicted that BlackBerry devices would become outdated like the pager. With this recent news of the once mighty BB leaving the market (http://www.androidauthority.com/blackberry-out-of-consumer-market-271640/), it looks like that forecast has come true.
The company has close to $1 billion in operating losses in the second quarter of the fiscal year 2014, according to an online article on Yahoo! (http://finance.yahoo.com/news/blackberry-announces-preliminary-second-quarter-191514060.html). To make matters worse, the company has laid off 4,500 workers. It looks like Android and iPhone have finally put a competitor out for good. Rest in peace, BlackBerry. You will be remembered.
Of course, there is no use reading this kind of material if you don’t learn anything from it. Here’s my takeaway:
Hihi… Spreading my LOVE to all you Fresh Milk readers!