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 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 large debt incurred through its acquisitions. Durant left the firm and established the Chevrolet Motor Company in 1911, but after a brilliant 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 turned its automotive factory into a war material factory. 90 percent of GM’s truck production was for the war between the years of 1917 and 1919. This would happen again during WWII, the Korean conflict and the Vietnam War.

In the 1920s GM underwent some business restructuring under the leadership of Alfred P. Sloan. Sloan mastered the balance between individual and centralized management and under his control GM surpassed Ford in sales by the late 1920s. Sloan’s hallmark, in addition to his effective management style, was his attention to consumer demands.

In 1930, GM began a foray into aircraft design and manufacturing through the creation of the General Aviation Manufacturing Corporation. By 1948, however, GM had turned its back on the aircraft manufacturing industry.

After World War II, GM continued to grow, becoming the first American corporation to pay taxes of more than $1,000 million. In addition, GM was one of the largest employers in the world – at one point during the 1950s, only the Soviet Union’s state-sponsored industries employed more people.

Throughout the next three decades, GM maintained its world leadership in revenue and market share. Although it suffered some setbacks in terms of quality problems and vehicle defects, GM continued to dominate as one of the world’s largest companies.

Under the leadership of Roger B. Smith in the 1980s, GM began to experience a decline in revenue, sales and production. By the early 1990s, GM began to lose money for the first time. 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 took the reins as chairman of GM and he undertook a radical restructuring of the company. 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 and with a stock price of more than $80/share in 2000.

The 21st century has seen GM’s strength as the world’s largest automaker tested, as Toyota has, at times, captured that coveted title. Under the leadership of CEO Rick Wagoner, the company has attempted to lessen its future health care and pension liabilities and to increase its stock value, which hit lows not seen in 50 years in 2008.

On June 1, 2009, the company declared bankruptcy and received assistance from the federal govrenment in order to remain in operations and reorganize.

 


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