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General Motors - The Durant Years

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William C. Durant

William C. Durant

David Dunbar Buick established the Buick Auto-Vim and Power Company in 1899 to build gasoline engines in Detroit, Michigan. He then expanded the company to become the Buick Manufacturing Company in 1902 so he could sell the engines to vehicle manufacturers; and then it became the Buick Motor Company the following year. Financial troubles plagued Buick and before the year was out James H. Whiting bought the company, eventually moving it to Flint, Michigan.

In 1876 Samuel McLaughlin started the McLaughlin Carriage company in Ontario, Canada, and by 1903 they were leaders in the industry. He also owned the Chevrolet Motor Company of Canada Limited and in 1915 the two became General Motors of Canada Limited.

In 1886 William C. Durant started the Durant-Dort Carriage Company and by 1903 he had factories in the United States and Canada that provided a variety of components to Buick and and McLaughlin, among others. In 1904 Durant bought the Buick Motor company from Whiting and then contracted with McLaughlin to build his engines and drivetrains. The cars became known as "McLaughlins", then "McLaughlin-Buicks" and finally "Buicks".

In 1907 Charles S. Mott moved his Weston-Mott bicycle company to Flint, Michigan, and the next year he and Durant merged their companies under the General Motors Company name and McLaughlin became a principal shareholder.

Durant apparently did not have an official title but it was obviously his show and he began by spending capital and borrowed money at a feverish pace to build an empire. George E. Daniels was hired as president to handle the day-to-day operations of the company but a month later he was replaced by William M. Eaton, who served until 1910. Most automobile manufacturers of the time, such as Henry Ford, produced one new primary model a year but Durant envisioned a broader market. He started in 1908 by purchasing the Olds Motor Works company from Ransom E. Olds over the next two years bought all of, or controlling interest in, the Cadillac Company from Henry Leland, the Oakland Motor Car Company from Edward M. Murphy, the Elmore Manufacturing Company from the Becker brothers, the Motorcar Company (Cartercar automobile) from Byron J. Carter, the Chelsea Manufacturing Company (Welch automobile) from the Welch brothers, and the Rainier Motor Car Company (Marquette automobile) from John T. Rainier. He also bought the Reliance Motor Car Company and purchased the Rapid Motor Vehicle Company from the Grabowsky brothers at that time to form a new truck division. Their buying spree put them deeply in debt and when Durant suggested that they give Henry Ford eight million dollars for his company their bankers not only refused but forced Durant out of the company and Eaton retired.

In 1910 The investment bankers made one of their own, James J. Storrow, the new interim president and then replaced him with Thomas Neal a few months later. Neal served as president until 1912 and then became the first GM Chairman of the Board. During his tenure Neal merged the Reliance and Rapid truck companies into the "GMC" Truck Company and expanded operations into other countries but was forced out in 1915 during a bitter proxy battle between investors and Durant.

Durant was a very shrewd businessman and he left the General Motors Company with considerable assets which he used to attract new investors. While at General Motors Durant had used Louis Chevrolet, a prominent race car driver, to promote Buicks and his first order of business was capitalized on the name by forming the Chevrolet Motor Car Company. Their first car, the "Series C Classic Six", was a flop and in 1915 Chevrolet sold out to Durant to concentrate on his racing career. Then Durant bought the Scripps-Booth Corporation and introduced the more successful "Series 490 Chevrolet".

At that point Durant had enough capital to attract Samuel McLaughlin who agreed to merge his Canadian Chevrolet and General Motors companies with Durant's companies to regain control of General Motors in the United States. And the key to their success was the willingness of Pierre du Pont, a third generation heir to the founder of the DuPont Chemical Company, to buy 43 percent of the General Motors Company stock, thus becoming the primary share holder, and support their quest. The combined stock the three investors assured their victory in a hostel takeover that resulted in Durant becoming the president and DuPont the chairman of the board. They then reorganized as the General Motors Corporation in 1916.

Once the dust settled Durant began another spending spree to give the GM dealers a variety of vehicles that would appeal to all walks of life. And he wanted to perpetuate that business model in other areas, such as home appliances, as well. His first acquisition was the Chevrolet Motor Car Company, followed by the Samson Tractor Company, the McLaughlin Carriage Company, the Fisher Body Company and the Guardian Frigerator Company (Frigidaire). He also started development of the "Sheridan", the first totally new General Motors vehicle. And he founded the United Motors Company, independent of GM, that purchased a host of part manufacturing companies with now-famous names like Hyatt, Dayton, Delco and Remy. He put Alfred P. Sloan in charge of that company and then sold it to the General Motors Corporation for over 44 million dollars in 1918. Durant was building an automobile empire for the second time but once again his investors got nervous about his spending and in 1920 the board of directors replaced him with DuPont.

Having been through that before, Durant moved on to form Durant Motors the following year in an attempt to rival General Motors. He produced the Durant "Star", designed (but never made) the "Princeton", bought the Sheridan automobile plans from General Motors and bought the Locomobile Company of America. However he was too far in debt when the Great Depression came in 1929 and had to quit. Durant poured all of his resources into the stock market in an effort to encourage others to do likewise and thereby stop the slide but it proved futile and he lost everything.

Meanwhile Alfred P. Sloan became the vice president and then the president of General Motors in 1923, during which time he continued to build the lineup of cars that Durant had started. The company bought a majority stake in the yellow Truck and Coach Manufacturing Company (subsidiary of the Yellow Cab Company), developed the Pontiac to fill the gap between Chevrolet and Oakland in 1926, developed the LaSalle to sell just below the Cadillac in 1927 and the "Viking" to fit between the Oldsmobile and Marquette in 1929. He also acquired several foreign automobile companies that year. Like Durant, Sloan was an astute businessman and demonstrated his abilities by creating the concept of "planned obsolescence" and taking General Motors to the peak of success as the largest industrial company in the world. Sloan became Chairman of the Board in 1937 and retired from that position in 1956.

Early GM brand names

  • Buick (1908-
  • Oldsmobile (1908-2004)
  • Cartercar (1908-1915)
  • Ewing (1908-1911)
  • Oakland (1908-1931)
  • Cadillac (1909-
  • Elmore (1909-1912)
  • Rapid Truck (1909-1912)
  • Reliance Truck (1909-1912)
  • Welch (1910-1911)
  • Rainier Marquette (1912)
  • Scripps-Booth (1912-1922)
  • Samson Tractor (1917-1922)
  • Chevrolet (1918-
  • McLaughlin (1918-1942)
  • Sheridan (1921-1922)
  • Yellow Coach (1925-1943)
  • Pontiac (1926-2010)
  • LaSalle (1927-1940)
  • Viking (1929-1931)
  • Marquette (1930)

* This story is a compilation of information gathered from a variety of sources that rarely agreed on anything and is therefore subject to scrutiny.