The history of GM, the world’s largest automobile manufacturer, began in 1908. The company was founded by William Durant in 1902. Astute businessman that he was, Durant realized that the future lay in automobiles. and not in carriages. Initially, the company was founded as a holding company for Buick. In the latter part of the year, the company acquired Oldsmobile, followed by possession of Cadillac, Oakland, and Elmore the following year.
Many of the auto companies were in dire straits during the difficult years of the early 20th century. The stock market panic of 1907 put many small businesses in financial trouble. Many of these companies operated on the credit of various bankers. This was a golden opportunity for Durant, who proceeded to buy smaller automakers and companies that made auto parts and accessories. In 1908 these various companies were merged into a single unit, thus creating the new GM entity. This marked the exciting beginning of the true GM story.
William Durant was a flamboyant businessman whose curious combination of genius and overreach led GM to its heights and into financial trouble. In 1910, bankers were forced to step in to prevent GM’s financial collapse, and Durant was ousted from the company he had founded. But by 1911, the company had advanced enough in the international market that the General Motors Export Company was established to handle sales outside the US and Canada.
Durant was able to use another company he formed, Chevrolet, to return to power at GM during 1915, and GM’s history from 1915 to 1920 is one of success. During this time, the Cadillac was extremely successful. In 1918, GM bought the operating assets of Chevrolet Motors. But, soon the United States was hit with an energy recession and in 1920, Durant again found himself out of business.
During the financial boom of the 1920s, the GM story practically shone with success. Car sales hit the 4.5 million mark, and the auto industry now had three giants: GM, Ford, and Chrysler. GM now had a brilliant engineer turned industrialist at its helm. Alfred Sloan, later hailed for his marketing genius, had slowly worked his way up the ranks at GM. His marketing genius breathed new life into GM, which was beginning to be eclipsed by Ford.
Ford’s philosophy of giving the public the best value for money offered little variety. But Sloan and GM were interested in giving the public more than just a black box. Stylish colors, features and comfort became the company’s new motto. GM also made a groundbreaking offer: the public could now buy a car on credit. GM’s five brands – Pontiac, Cadillac, Buick, Oldsmobile and Chevrolet began to change each year with the focus being primarily on appearance and styling. This strategy paid big dividends. Ford was pushed into the back seat again by GM.
The great Wall Street Crash of 1929 abruptly ended all GM expansion plans for the time being. GM shares fell pretty badly. But, in the early 1930s, GM rallied and bought the Yellow Coach bus company. In 1930, GM bought the Electro-Motive Corporation, the builder of internal combustion engine wagons. The next 20 years saw GM-powered diesel locomotives running on American railroads. December 31, 1955 is another milestone in GM history. GM became the first company to earn more than $1 billion in a year.
There was a time in GM’s history when it was the largest corporation in the US GM’s history also shows that there was a time when GM was the world’s largest employer. But of late, GM has been beset by financial problems. In November 2005, GM posted a $4 billion loss and laid off some 30,000 employees. 12 plants were closed.