- Business and Employment»
- History of Business
General Motors : 1820 - 1960
General Motors in 2004
General Motors Corporation, or abbreviated GM, was the world's largest automaker and one of the world's largest truck manufacturers.
In 2004, it produced approximately thirty percent of all American cars, and fifteen percent of all cars worldwide !
GM's headquarters are located in Detroit, and it was then the largest US company, based on sales.
GM sold Buick, Cadillac, Chevrolet, Geo, GMC, Oldsmobile, Pontiac and Saturn. It owned the German Opel and the UK Vauxhall. It was a majority shareholder of the Swedish Saab, and the Japanese Isuzu.
Other company branches were the Hughes Electronics Corporation (telecommunications systems), and General Motors Acceptance Corporation (GMAC), one of the largest financial services companies in the world, with insurances and loans. Finally, GM also buildt locomotives.
Flint, Michigan, in 1820
From the 1820's, the city of Flint was the center of the carriage makers.
In 1888, William C. Durant and his partner founded the Durant-Dort Carriage Company, which manufactured horse drawn carriages with a leaf spring suspension.
Fifteen years later the company was market leader throughout the USA, and Durant was a millionaire !
In 1903, the Scot David Dunbar Buick founded the Buick Motor Car Company in Flint. This company would become world famous, but Buick's financial gifts were unfortunately not as great as his mechanical acumen, and one year later he stood on the edge of the financial abyss.
The same year also saw the beginning of the switch from carriage manufacturing to car manufacturing. The city of Flint converted in no time to this new industry, and almost immediately received the label of Vehicle City.
Old carriage warehouses and workshops, that usually were built in several floors, had to be converted quickly, or simply had to be moved to new and modern buildings, where everything happened on the same floor.
Several factors were instrumental in this very rapid conversion. There was a large supply of risk capital, originating in the immense profits of the railroads, mines and industry, and there was an abundance of cheap labor.
A Surge of Automobile Tycoons
Next to Durant and almost simultaneously, there appeared several strong personalities.
* Walter P. Chrysler, who was Buick's Works Manager in 1912
* Ransom Eli Olds of Lansing, who in 1897 founded the Olds Motor Vehicle Company, and who was the first manufacturer of passenger vehicles
* Henry M. Leland, who in 1902 founded the Cadillac Automobile Company, named after the French explorer Antoine de la Mothe Cadillac, who founded Detroit
* Henry Ford
* Edward P. Murphy, who founded the Oakland Motor Car in Pontiac, Michigan, later renamed to Pontiac.
In 1904, Billy Durant bought the ailing Buick company, and succeeded again in restructuring this company in 15 years time to the largest car manufacturer in the USA, after Henry Ford. Between 1905 and 1920, Buick built more than one million cars !
This tremendously fast development did not come without a struggle though.
William Durant came to the conclusion that every manufacturer who developed only one model would continuously teeter at the edge of bankruptcy. He became convinced that a large company would be better armed, if it manufactured several models.
General Motors and Durant's Exit # 1
In 1908, Durant founded the General Motors Company, and approached other manufacturers with his ideas.Buick and Olds joined GM in the same year, and Pontiac and Cadillac followed in 1909.
By 1910, GM had bought more than twenty other manufacturers !
But his many purchases with borrowed money put him in a vulnerable position, and in 1910 the banks took control of GM, and threw Durant out of the board...
Chevrolet Motor Company
Durant did not take this lying down, and in 1911 he founded the Chevrolet Motor Company, together with the Swiss car racer Louis Chevrolet.
The new company grew rapidly by making less expensive models, so that it could compete with the popular Ford Model T.
With the ensuing profits, Durant bought GM shares, and in 1916 he was again firmly in the saddle of GM !
He immediately bought Dayton Engineering Laboratories Company (Delco), a company founded by Charles F. Kettering, the inventor of the electric ignition.
In 1918, Chevrolet officially joined General Motors.
Durant's Exit # 2...
In 1920, GM again faced financial problems, and Durant was ousted from the company for the second time...
The new president of GM was none other than Pierre S. du Pont, also chairman of du Pont de Nemours. In 1923 however, he was succeeded by the former assistant of Durant, Alfred P. Sloan Jr., who remained at the helm of the company for the next twenty three years.
Sloan was a workaholic, who completely reorganized the company, decentralized it, and constantly innovated it by practical improvements.His extraordinary legacy is that he converted the previously loosely connected large company into an industrial empire, despite later problems.
The Great Depression
In 1927 and for the first time, GM sold more vehicles than Ford ! But a few years later, business took a terrific hit during the Great Depression. In 1932, General Motors manufactured 75% less cars than in 1929, and Buick even completely closed its doors in 1930 !
The GM group fired thousands of workers, ran the assembly lines faster, and eliminated all sorts of safety measures. The management used all possible means (legal and illegal...), and even resorted to violence, to continue the appalling working conditions and curtail the emerging power of the unions.
The unrest still increased, and in 1936 and 1937 the unions organized massive sit-down strikes, whereby the strikers remained inside the factory. The local police tried to restrain the strikers with tear gas, which led the governor of Michigan to bring in the National Guard. Apparently, even today the political mathematics are as follows : unions = voters = election time...
This impasse was only broken when still other GM companies stopped working, and the whole company got into deep trouble. In 1937, GM finally folded, and it recognized the union as the sole interlocutor for its workers.
World War Two
In 1940, World War II broke out, and in 1941 all the assembly lines of the car industry were converted to military production, with heavy military aid. They now produced tanks, airplanes, motorcycles, vehicles, weapons and military equipment.
The Flint factories were soon called The Arsenal of Democracy. The Buick complex, once GM's largest factory, formed the base of wartime mass production.
Post War Production
In 1945, Buick again opened its doors to the public, and the lines were converted once more to the production of "normal" cars.
In 1946, GM released super-modern cars, with brilliant innovations such as an automatic gearbox, power steering, power brakes, air conditioning and seat belts.
In 1953 Chevrolet introduced the Corvette sports car, the first mass produced car with a fiberglass body.
The incredible growth of GM would continue until the 1970s, when it employed 349,000 workers and operated 150 assembly plants !