A Brief History of General Motors
Beginning with an investment in Buick in 1903, GM founder William “Billy” Durant quickly assembled the companies that became General Motors. GM was first incorporated on September 16, 1908, and within a few years would include familiar names such as Oldsmobile, Cadillac, and Oakland, which eventually became Pontiac.
Buick has one of the most storied heritages of any American automobile. After experimental Buick automobiles were built between 1899 and 1903, David Dunbar Buick, a former plumbing inventor/executive, incorporated Buick Motor Co. in Detroit in 1903. The company was moved to Flint, Mich. later that year. William Durant took control of Buick in November 1904. Within four years, Durant made Buick the country’s leading automobile producer, and on Buick’s success, Durant created General Motors in 1908. Buick reaches 105 years in North America and nearly 100 years in China. News items suggest that the beginning of Buick’s presence in China dates as far back as 1906. Dr. Sun Yatsen, the first provisional president of the Republic of China, appears in a photograph riding in a Buick in 1912, the year he was inaugurated.
Oldsmobile becomes the second company to join General Motors when Olds Motor Works is sold to GM on Nov. 12, 1908. Fisher Body Company is incorporated on July 22, 1908, by Albert, Fred and Charles Fisher and located in Detroit.
General Motors purchases a half interest in Oakland Motor Car Co. on January 20, 1909. When its founder, Edward Murphy, passes away, his company comes under the full control of General Motors. In 1932, the Oakland name is dropped from the vehicle line and Pontiac becomes the name of the division.
General Motors purchases Cadillac for $5.5 million on July 29, 1909. Henry M. Leland and his son, Wilfred, are invited to continue operating Cadillac. They do so until 1917, when they leave to form Lincoln Motor Co.
AC Spark Plug joins GM. Known as Champion Ignition Company in 1909, the name is changed to AC Spark Plug Company in 1922 and made a division in 1933.
General Motors acquires the Rapid Motor Vehicle Company of Pontiac, Michigan, the predecessor of General Motors Truck Company (later known as GMC) GMC Truck, and Reliance Motor Truck Co. of Owosso, Michigan.
Durant’s frenzied pace of acquisition exhausted the patience of GM’s bankers, and in 1910, Durant stepped down as president. Deterred but not defeated, Durant quickly joined forces with race driver Louis Chevrolet to create a new brand to challenge the Ford Model T.
Louis Chevrolet’s successes as a race-car driver and and determination at the wheel of early racing machines gained the attention of William Durant. The automaker signed Chevrolet up to drive for his Buick racing team in 1909. A short while later, Durant and Chevrolet formed a partnership to produce an automobile bearing the Chevrolet name.
When Durant was ousted from GM in the midst of a 1910 financial crisis, he set out to re-enter the auto industry without missing a beat. Soon, he had an arrangement with Louis Chevrolet to build a car bearing the well-known racer’s name. Just as in 1904, when Durant had stepped into the driver’s seat of David Dunbar Buick’s ailing auto company, the industrialist secured rights to the brand name that came with the agreement. On November 3, 1911, the Chevrolet Motor Car Company was incorporated.
One year after the Chevrolet Motor Car Company was established, the first car to bear the Chevrolet name—a thoroughly contemporary, powerful and luxurious car—rolled out of a pilot factory in Detroit. This $2,100 Chevrolet was introduced as the Type C Six for 1913.
Durant’s plan for the Chevrolet automobile differed from that of his partner. He envisioned the Chevrolet brand on an inexpensive car that would offer significantly more value than the volume leader of the period, while selling for only a bit more money.
The four-cylinder “Royal Mail” roadster and “Baby Grand” touring car models Durant introduced at $750 and $875 respectively in mid-1913 set Chevrolet on the road to achieving this goal.
Louis Chevrolet felt his influence slipping away, and perhaps the legendary ‘cigar/cigarette argument’ between him and Durant that abruptly ended their partnership was inevitable. In late 1913, Louis returned to the world of automobile racing, both as a driver and as a racecar builder. By 1915, he’d fully disposed of his financial holdings in the Chevrolet Motor Car Co. In the closing months of that same year, Durant introduced his $490 Chevrolet 490 for 1916 into the low-priced car market.
Before 1915 was out, Durant leveraged the strength of his Chevrolet company stock to effectively retake control of General Motors. In 1918, Durant officially merged Chevrolet into GM. However, the ebullient empire builder would lose control of GM yet again in 1920…leaving it to others to build the Chevrolet brand into the auto industry leader he’d intuitively sensed it could become.
Post-Durant GM
In creating this new post-Durant company, GM also created the archetype for the modern corporation. To rationalize Durant’s far flung network, a management team led by Alfred Sloan set up policy committees and staffs to coordinate GM’s various divisions, a strategy Sloan described as “decentralized operations and responsibilities, with coordinated control.” Under Sloan’s leadership, GM also organized its divisions to provide “a car for every purse and purpose,” allowing customers to start with a lower-priced Chevrolet and move up as far as Cadillac, should their means allow. With these strategies, GM swept past Ford for sales leadership, quickly becoming one of the most successful companies in the world.
During this period, GM also began its global expansion. GM purchased U.K. automaker Vauxhall in 1925. Opel, which built its first car in 1899 after success as a sewing machine and bicycle manufacturer, joined GM in 1929. In 1931, Australia’s Holden was also acquired by GM.
From the 1931 through the first energy crisis in 1973, GM was the unchallenged leader of the industry, especially in its home market in the U.S. Its efficiencies enabled it to weather the Great Depression, and its powerful brands, emotional designs, and technical prowess perfectly suited the optimism of America during post World War II boom.
In addition to creating iconic cars such as the 1949 Buick Roadmaster, 1957 Chevrolet Bel Air, and 1959 Cadillac El Dorado, GM also helped pioneer such industry innovations as the concept car, the automatic transmission, air conditioning, and fuel injection. By the late 1960s, GM was so successful that it built almost half the cars sold in America, and directly employed more than 400,000 people in the U.S., and nearly 800,000 around the world
Starting in the 1970s, a series of structural changes rocked the auto industry, and these changes proved a tough challenge for a GM that had been too large and too successful for too long to change directions easily.
Environmental, fuel economy, and safety regulations forced carmakers to rapidly downsize vehicles and adopt unfamiliar technologies such as four-cylinder engines and front-wheel-drive. At the same time, Japanese and German carmakers started a major push into the U.S. market, which unlike markets in Europe and Asia, welcomed newcomers. Throughout the 1970s and 1980s, GM responded with new products, reorganizations, and acquisitions, along with an aggressive push into new global markets. Some of these efforts were successful, such as GM’s ventures in China and Korea. But in the key U.S. and Western European markets, GM raced against time to reshape itself into the smaller, more efficient company the new global realities required.
In 2008, the clock ran out. A major recession and global credit crisis drove car sales to near depression levels and dried up private sources of capital. GM, critically short of operating cash, received a bridge loan from the U.S. Treasury, and the company filed for bankruptcy on June 1, 2009. A new General Motors Company, which acquired many of the strongest assets of the old company, was created July 10, 2009, with the U.S. Treasury, Canadian governments, and the UAW Retiree Medical Benefit Trust as its major shareholders.
This new GM is smaller, leaner company than its predecessor. It has four brands in the U.S.: Chevrolet, Buick, GMC, and Cadillac. It has a more focused network of 4,500 dealers and competitive labor agreements with its unions. Globally, GM continues to grow rapidly, and more than 70 percent of its sales now come from outside the U.S. GM’s top five markets by sales are now China, the United States, Brazil, the United Kingdom, and Germany.
Re-emerging at the new GM is the competitive spirit that, for decades, drove GM to leadership in styling, technology, engineering, marketing, and other key areas of the auto business. This spirit guides the new GM as it works to design, build, and sell the world’s best vehicles.
1897
Olds Motor Vehicle Company, Inc., the oldest unit of General Motors Corporation, is organized by Ransom E. Olds with capital of $50,000 (5,000 shares of stock at $10 per share) and the first Oldsmobile is produced.
1899
Olds Motor Vehicle and Olds Gasoline Engine Works of Lansing merge to form Olds Motor Works. This new company is incorporated on May 8, 1899 with $500,000 capital. The first factory specifically for automobile manufacture in the United States is built by Olds in Detroit on Jefferson Avenue East.
1902
Cadillac Automobile Company is organized in Detroit by Henry M. Leland, a precision manufacturer of automotive components
1903
Buick Motor Company, founded by David Dunbar Buick, is incorporated on May 19, 1903. Ground is broken for the first Buick engine plant on September 11, 1903, with funding from Flint Wagon Works, and operations are moved from Detroit to Flint
1905
Cadillac produces the Osceola, a single-cylinder favorite of Henry Leland and the first step-in closed-car design. The body was built under the supervision of Fred J. Fisher (who later founded Fisher Body with his brothers) in the Wilson Body Company plant in Detroit.
1907
The Oakland Motor Car Co., predecessor to Pontiac Motor, is founded by Edward M. Murphy on August 28, 1907 in Pontiac, Michigan
1908
General Motors Company is organized in 1908 (Sept 16), incorporating the Buick Motor Company. Oldsmobile becomes the second company to join General Motors when Olds Motor Works is sold to GM on Nov. 12, 1908. Fisher Body Company is incorporated on July 22, 1908, by Albert, Fred and Charles Fisher and located in Detroit.
1909
General Motors purchases a half interest in Oakland Motor Car Co. on January 20, 1909. When its founder, Edward Murphy, passes away the following summer, his company comes under the full control of General Motors. In 1932, the Oakland name is dropped from the vehicle line and Pontiac becomes the name of the division.
General Motors purchases Cadillac for $5.5 million on July 29, 1909. Henry M. Leland and his son, Wilfred, are invited to continue operating Cadillac. They do so until 1917, when they leave to form Lincoln Motor Co.
AC Spark Plug joins GM. Known as Champion Ignition Company in 1909, the name is changed to AC Spark Plug Company in 1922 and made a division in 1933.
General Motors acquires the Rapid Motor Vehicle Company of Pontiac, Michigan, the predecessor of GMC Truck, and Reliance Motor Truck Co. of Owosso, Michigan. A Rapid becomes the first truck to conquer Pikes Peak in 1909.
1910
Cadillac is the first American manufacturer to offer closed bodies as standard equipment, revolutionizing motoring convenience by providing cleanliness and all-weather comfort.
1911
Charles F. Kettering’s milestone invention, the electric self-starter, is first installed in a Cadillac on February 27, 1911. 1912 Cadillac adopts the electric self-starter as standard equipment.
General Motors Truck Company (later known as GMC) is organized on July 22, 1911, to handle sales of GM’s Rapid and Reliance products.
Chevrolet Motor Company of Michigan is incorporated in November of 1911 by Louis Chevrolet, William Little and Edwin Cambell
1914
Cadillac is the first manufacturer in the U.S. to produce a V-type, water-cooled, eight-cylinder engine. The 314-cubic-inch engine produces 70 horsepower at 2,400 RPM and is the first major step in development of high-speed, high-compression automotive engines. Cadillac becomes the first in the auto industry to use thermostatic control of a cooling system. Cadillac’s V-8 engine is installed in all its models and the V-8 emblem is added to Cadillac designs. On September 13, 1915,
1918
General Motors buys the operating assets of Chevrolet Motor Company in May.
The General Motors Corporation (GM) acquired the Chevrolet Motor Company of Delaware. The deal was effectively a merger engineered by William Durant. The original founder of GM, Durant had been forced out of the
company by stockholders who had disapproved of Durant’s increasingly reckless expansionist policies a few years earlier. Durant started Chevrolet with Swiss racer Louis Chevrolet and managed to make the company a successful competitor in the economy-car market in a relatively short period of time. Still the owner of a considerable portion of GM stock, Durant began to purchase more stock in GM as his profits from Chevrolet allowed. In a final move to regain control of the company he founded, Durant offered GM stockholders five shares of Chevrolet stock for every one share of GM stock. Though GM stock prices were exorbitantly high, the market interest in Chevrolet made the five-for-one trade irresistible to GM shareholders. With the sale, Durant regained control of GM.
1919
Construction of the General Motors Building in Detroit begins