Personal Financial Tips

Article by Nick Messe

The current troubled times that General Motors is going through can easily obscure the simple fact that General Motors has been a wildly successful company for almost a hundred years. For decades General Motors has enjoyed a position of automobile manufacturing supremacy, selling more vehicles around the world than any other company. But that dominance was not without its ups and downs.

General Motors has a long and somewhat complicated history. The company was started by William Durant in 1908 as a holding company for the Buick manufacturing company. Within a year it had acquired Oldsmobile, Cadillac and several other smaller companies.

Very soon after this rapid expansion, car sales in the U.S. softened considerably and the company ran into problems in some ways very similar to those of the last few years. Because he had borrowed heavily to expand the company quickly Durant was forced out of his ownership position so the company could reorganize.

In retrospect this was a good thing and forced Durant to go back to the drawing board. The result was the birth of Chevrolet, a brand modeled to some degree on the ideas of Henry Ford whose original, very successful objective was to make an attractive and affordable car for the working men and women of America.

The success of Chevrolet gave Durant the power and influence to gradually buy back into General Motors, and within a few short years he had acquired a controling interest in General Motors again.

Durant reorganized General Motors in the U.S. and was also instrumental in forging a partnership with Colonel Sam McLaughlin of Toronto Canada to form General Motors Canada. From that day till the present General Motors has remained an integrated North American company with approximately 20% of its manufacturing capacity located in southern Ontario, Canada.

The early success of the new General Motors Corporation was due in large part to the success of Chevrolet. In those early days “Chevy” was an innovative brand which had carved out a distinctive niche – to provide a better alternative to the “everyman” customer who had come to identify with Henry Ford’s early vehicles.

As early as 1918 Chevrolet introduced a production V-8 engine, an overhead valve inline six cylinder engine, more advanced carburetors, the three speed transmission, and a five seater touring vehicle. Innovation continued through the next few decades and GM’s share of world wide vehicles steadily increased. By 1931 General Motors had climbed to the number one position in world wide vehicle sales, a position it would retain until 2007 when Toyota claimed the position.

General Motors’ innovation was slowed to some degree by the war effort. During the World War II much of GM’s capacity was given over to production of military vehicles and armaments. But immediately after the war GM was back in high gear producing trend setting vehicles and racking up sales records in the showroom.

By the 1950s General Motors had become an American institution with a vehicle for every market niche – low end, middle of the road, high end, trucks and commercial vehicles – GM was everywhere. In fact by 1963 Chevrolet itself accounted for one in every ten new cars sold in the U.S.

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