Encyclopedia Of Detroit
General Motors
William C. Durant founded General Motors in 1908. Originally intended as a holding company for the Buick Car Company, within two years Durant brought some of the biggest names in the automotive industry, including Oldsmobile, Cadillac, Oakland (later known as Pontiac) and the predecessors of GMC Truck.
In 1910, Durant lost control of the company to a banker’s trust as a result of the $15 million debt incurred through its acquisitions. Durant left the firm and established the Chevrolet Motor Company in 1911, but after a stock buy-back campaign, he returned to lead GM in 1916, bringing Chevrolet into the fold. Over the next decade, GM would continue to grow, acquiring more companies.
During World War I, GM produced war materiel. 90 percent of GM’s truck production between 1917 and 1919 was for the war. Durant’s leadership ended in 1920 after another bank buyout. In the 1920s GM underwent more business restructuring headed by Alfred P. Sloan, including moving its headquarters from Flint, Michigan to the newly built GM Building in Detroit. Sloan balanced individual and centralized management and under his control GM surpassed Ford in sales by the late 1920s.
After World War II, GM continued to grow, becoming the first American corporation to pay more than $1 billion in taxes. In addition, GM was one of the largest employers in the world. Its iconic Corvette was introduced in 1953. Throughout the next three decades, GM maintained its world leadership in revenue and market share, though it suffered some setbacks in terms of quality problems and vehicle defects.
Under the leadership of Roger B. Smith in the 1980s, GM began to experience a decline. Foreign automakers, led by Toyota and Honda, were capturing some of GM’s market share and the unwieldy GM bureaucracy was often slow to respond to changes in consumer demands. In the early 1990s, Jack Smith became GM chairman and undertook a radical restructuring. Through a reduction in the work force, deep cost-cutting and the elimination of some of GM’s most noted product lines, including Oldsmobile, the company found itself regaining market share.
The 21st century has tested GM’s strength as the world’s largest automaker, Toyota at times capturing that coveted title. CEO Rick Wagoner attempted to lessen its future health care and pension liabilities and increase its stock value but could not stop the financial bleeding. On June 1, 2009, the company declared bankruptcy and received assistance from the federal government, emerging from bankruptcy in under 40 days as General Motors Company. One of the largest bankruptcy filings in U.S. history, the bailout saved over a million jobs, at a cost to the U.S. government of $11 to $12 billion dollars.
On December 9, 2013 the U.S. government got out of the auto business, selling its remaining shares of GM stock. One day later, GM became the first automaker to appoint a female CEO. Mary Barra was elected chairman of the board in 2016.
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