The story
Founded by Charles Stewart Mott and William Crapo Durant on Sep 16, 1908, in Detroit.1
Founding and consolidation
By 1900, William C. Durant's Durant-Dort Carriage Company of Flint, Michigan, had become the largest manufacturer of horse-drawn vehicles in the United States. Durant was averse to automobiles, but fellow Flint businessman James H. Whiting, owner of Flint Wagon Works, sold him the Buick Motor Company in 1904. Durant formed the General Motors Company in 1908 as a holding company, borrowing a naming convention from General Electric. GM's first acquisition was Buick, which Durant already owned, then Olds Motor Works on November 12, 1908. Under Durant, GM went on to acquire Cadillac, Elmore, Welch, Cartercar, Oakland (the predecessor of Pontiac), the Rapid Motor Vehicle Company of Pontiac, Michigan, and the Reliance Motor Car Company of Detroit, Michigan (predecessor of GMC) in 1909.
Durant, with the board's approval, also tried acquiring Ford Motor Company in 1909, for $8 million, but the banks refused to lend him the initial $2 million down payment. Durant over-leveraged GM in making acquisitions, and was removed by the board of directors in 1910 at the order of the bankers who backed the loans to keep GM in business. The action of the bankers was partially influenced by the Panic of 1910–1911 that followed the earlier enforcement of the Sherman Antitrust Act of 1890. In 1911, Charles F. Kettering of Dayton Engineering Laboratories Company (DELCO) and Henry M. Leland invented and patented the first electric starter in America. In November 1911, Durant co-founded Chevrolet with race car driver Louis Chevrolet, who left the company in 1915 after a disagreement with Durant.
GM was reincorporated in Detroit in 1916 as General Motors Corporation and became a public company via an initial public offering. By 1917, Chevrolet had become successful enough that Durant, with the backing of Samuel McLaughlin and Pierre S. du Pont, reacquired a controlling interest in GM. The same year, GM acquired Samson Tractor. Chevrolet Motor Company was consolidated into GM on May 2, 1918, and the same year GM acquired United Motors, a parts supplier founded by Durant and headed by Alfred P. Sloan for $45 million, and the McLaughlin Motor Car Company, founded by R. S. McLaughlin, became General Motors of Canada Limited. In 1919, GM acquired Guardian Frigerator Company, part-owned by Durant, which was renamed Frigidaire. Also in 1919, the General Motors Acceptance Corporation (GMAC), which provides financing to automotive customers, was formed.
In 1920, du Pont orchestrated the removal of Durant once again and replaced him with Sloan. At a time when GM was competing heavily with Ford Motor Company, Sloan established annual model changes, making previous years' models "dated" and created a market for used cars. He also implemented the pricing strategy used by car companies today. The pricing strategy had Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac priced from least expensive to most, respectively.
In 1921, Thomas Midgley Jr., an engineer for GM, discovered tetraethyllead (leaded gasoline) as an antiknock agent, and GM patented the compound because ethanol could not be patented. This led to the development of higher compression engines resulting in more power and efficiency. The public later realized that lead contained in the gasoline was harmful to various biological organisms including humans. Evidence shows that corporate executives understood the health implications of tetraethyllead from the beginning. As an engineer for GM, Midgley also developed chlorofluorocarbons, which have now been banned due to their contributing to ozone depletion in the upper atmosphere.
Under the encouragement of GM President Alfred P. Sloan Jr., GM acquired Vauxhall Motors for $2.5 million in 1925. The company also acquired an interest in the Yellow Cab Manufacturing Company the same year, and its president, John D. Hertz, joined the board of directors of GM; it acquired the remainder of the company in 1943.
Growth and acquisitions
In 1926, the company introduced the Pontiac brand and established the General Motors Group Insurance Program to provide life insurance to its employees. The following year, after the success of the 1927 model of the Cadillac LaSalle designed by Harley Earl, Sloan created the "Art and Color Section" of GM and named Earl as its first director. Earl was the first design executive to be appointed to leadership at a major American corporation. Earl created a system of automobile design that is still practiced today. At the age of 24, Bill Mitchell was recruited by Earl to the design team at GM, and he was later appointed as Chief Designer of Cadillac. After Earl retired in December 1958, Mitchell took over automotive design for GM. Also in 1926 the company acquired Fisher Body, its supplier of automobile bodies.
GM acquired Allison Engine Company and began developing a 1,000 horsepower liquid-cooled aircraft engine in 1929. The same year, GM acquired 80% of Opel, which at that time had a 37.5% market share in Europe, for $26 million. It acquired the remaining 20% in 1931.
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In the late-1920s, Charles Kettering embarked on a program to develop a lightweight two-stroke diesel engine for possible usage in automobiles. Soon after, GM acquired self-propelled railcar manufacturer Electro-Motive Company and the Winton Engine Co., and in 1941, it expanded EMC's realm to locomotive engine manufacturing and created the Electro-Motive Division (EMD).
In 1932, GM acquired Packard Electric (not to be confused with the Packard car company, which merged with Studebaker years later). The following year, GM acquired a controlling interest in North American Aviation and merged it with the General Aviation Manufacturing Corporation.
The GM labor force participated in the formation of the United Auto Workers labor union in 1935, and in 1936 the UAW organized the Flint Sit-Down Strike, which initially idled two key plants in Flint, Michigan, and later spread to 6 other plants including those in Janesville, Wisconsin and Fort Wayne, Indiana. In Flint, police attempted to enter the plant to arrest strikers, leading to violence; in other cities, the plants were shuttered peacefully. The strike was resolved on February 11, 1937, when GM recognized the UAW as the exclusive bargaining representative for its workers and gave workers a 5% raise and permission to speak in the lunchroom.
Walter E. Jominy and A.L. Boegehold of GM invented the Jominy end-quench test for hardenability of carbon steel in 1937, a breakthrough in heat treating still in use today as ASTM A255. GM established Detroit Diesel the next year.
In 1939, the company founded Motors Insurance Corporation and entered the vehicle insurance market. The same year, GM introduced the Hydramatic, the first affordable and successful automatic transmission, for the 1940 Oldsmobile.
During World War II, GM produced vast quantities of armaments, vehicles, and aircraft for the Allies of World War II. In 1940, GM's William S. Knudsen served as head of U.S. wartime production for President Franklin Roosevelt, and by 1942, all of GM's production was to support the war. GM's Vauxhall Motors manufactured the Churchill tank series for the Allies, instrumental in the North African campaign. GM was also a major manufacturer of aircraft, setting up the Eastern Aircraft Division with five plants to assemble Grumman-designed aircraft for the allied navies. However, its Opel division, based in Germany, supplied the Wehrmacht with vehicles such as the Opel Blitz. Politically, Sloan, as head of GM at the time, was an ardent opponent of the New Deal, which bolstered labor unions and public transport. Sloan admired and supported Adolf Hitler. Nazi armaments chief Albert Speer allegedly said in 1977 that Hitler "would never have considered invading Poland" without synthetic fuel technology provided by General Motors. GM was compensated $32 million by the U.S. government because its German factories were bombed by U.S. forces during the war.
Effective January 28, 1953, Charles Erwin Wilson, then GM president, was named by Dwight D. Eisenhower as United States Secretary of Defense.
In December 1953, GM acquired Euclid Trucks, a manufacturer of heavy equipment for earthmoving, including dump trucks, loaders and wheel tractor-scrapers, which later spawned the Terex brand.
Periods of innovation
Alfred P. Sloan retired as chairman and was succeeded by Albert Bradley in April 1956.
In 1962, GM introduced the first ever turbocharged production car in the world in the Oldsmobile Cutlass Turbo-Jetfire. Two years later, the company introduced its "Mark of Excellence" logo and trademark at the 1964 New York World's Fair. The company used the mark as its main corporate identifier until 2021.
GM released the Electrovan in 1966, the first hydrogen fuel cell car ever produced. Though fuel cells have existed since the early 1800s, General Motors was the first to use a fuel cell, supplied by Union Carbide, to power the wheels of a vehicle with a budget of "millions of dollars".
In the 1960s, GM was an early proponent of V6 engines, but quickly lost interest as the popularity of muscle cars increased. GM demonstrated gas turbine vehicles powered by kerosene, an area of interest throughout the industry, but abandoned the alternative engine configuration due to the 1973 oil crisis.
In partnership with Boeing, GM's Delco Defense Electronics Division designed the Lunar Roving Vehicle, which traversed the surface of the Moon, in 1971. The following year, GM produced the first rear wheel anti-lock braking system for two models: the Toronado and Eldorado.
In 1973, the Oldsmobile Toronado was the first retail car sold with a passenger airbag.
Thomas Murphy became CEO of the company, succeeding Richard C. Gerstenberg in November 1974.
GM installed its first catalytic converters in its 1975 models.
From 1978 to 1985, GM pushed the benefits of diesel engines and cylinder deactivation technologies. However, it had disastrous results due to poor durability in the Oldsmobile diesels and drivability issues in the Cadillac V8-6-4 variable-cylinder engines.
GM sold Frigidaire in 1979. Although Frigidaire had between $450 million and $500 million in annual revenues, it was losing money.
Robert Lee of GM invented the neodymium magnet, which was fabricated by rapid solidification, in 1984. This magnet is commonly used in products like a computer hard disk. The same year, GM acquired Electronic Data Systems for $2.5 billion from Ross Perot as part of a strategy by CEO Roger Smith to derive at least 10% of its annual worldwide revenue from non-automotive sources. GM also intended to have EDS handle its bookkeeping, help computerize factories, and integrate GM's computer systems. The transaction made Ross Perot the largest shareholder of GM; however, disagreements with Roger Smith led the company to buy all shares held by Ross Perot for $750 million in 1986.
In a continuation of its diversification plans, GMAC formed GMAC Mortgage and acquired Colonial Mortgage as well as the servicing arm of Norwest Mortgage in 1985. This acquisition included an $11 billion mortgage portfolio. The same year, GM acquired the Hughes Aircraft Company for $5 billion in cash and stock and merged it into Delco Electronics. The following year, GM acquired 59.7% of Lotus Cars, a British producer of high-performance sports cars.
In 1987, in conjunction with AeroVironment, GM built the Sunraycer, which won the inaugural World Solar Challenge and was a showcase of advanced technology. Much of the technology from Sunraycer found its way into the Impact prototype electric vehicle (also built by Aerovironment) and was the predecessor to the General Motors EV1.
In 1988, GM acquired a 15% stake in AeroVironment.
In 1989, GM acquired half of Saab Automobile's car operations for $600 million.
Sales of assets
In August 1990, Robert Stempel became CEO of the company, succeeding Roger Smith. GM cut output significantly and suffered losses that year due to the early 1990s recession.
In 1990, GM debuted the General Motors EV1 (Impact) concept, a battery electric vehicle, at the LA Auto Show. It was the first car with zero emissions marketed in the US in over three decades. The Impact was produced as the EV1 for the 1996 model year and was available only via lease from certain dealers in California and Arizona. In 1999–2002, GM ceased production of the vehicles and started to not renew the leases, disappointing many people, allegedly because the program would not be profitable and would cannibalize its existing business. All of the EV1s were eventually returned to General Motors, and except for around 40 which were donated to museums with their electric powertrains deactivated, all were destroyed. The documentary film Who Killed the Electric Car? covered the EV1 story.
In November 1992, John F. Smith Jr. became CEO of the company.
In 1993, GM sold Lotus Cars to Bugatti.
In 1996, in a return to its automotive basics, GM completed the corporate spin-off of Electronic Data Systems.
In 1997, GM sold the military businesses of Hughes Aircraft Company to Raytheon Company for $9.5 billion in stock and the assumption of debt.
In February 2000, Rick Wagoner was named CEO, succeeding Smith. The next month, GM gave 5.1% of its common stock, worth $2.4 billion, to acquire a 20% share of Fiat.
In December 2000, GM announced that it would begin phasing out Oldsmobile. The brand was eventually discontinued in 2004, seven years after it had become the first American car brand to turn 100.
In May 2004, GM delivered the first full-sized pickup truck hybrid vehicles, the 1/2-ton Chevrolet Silverado/GMC Sierra trucks. These mild hybrids did not use electrical energy for propulsion, like GM's later designs. Later, the company debuted another hybrid technology, co-developed with DaimlerChrysler and BMW, in diesel-electric hybrid powertrain manufactured by Allison Transmission for transit buses. Continuing to target the diesel-hybrid market, the Opel Astra diesel engine hybrid concept vehicle was rolled out in January 2005. Later that year, GM sold its Electro-Motive Diesel locomotive division to private equity firms Berkshire Partners and Greenbriar Equity Group.
GM paid $2 billion to sever its ties with Fiat in 2005, severing ties with the company due to an increasingly contentious dispute.
GM began adding its "Mark of Excellence" emblem on all new vehicles produced and sold in North America in mid-2005. However, after the reorganization in 2009, the company no longer added the logo, saying that emphasis on its four core divisions would downplay the GM logo.
In 2005, Edward T. Welburn was promoted to the newly created position of vice president, GM Global Design, making him the first African American to lead a global automotive design organization and the highest-ranking African American in the US motor industry at that time. On July 1, 2016, he retired from General Motors after 44 years. He was replaced by Michael Simcoe.
In 2006, GM introduced a bright yellow fuel cap on its vehicles to remind drivers that cars can operate using E85 ethanol fuel. They also introduced another hybrid vehicle that year, the Saturn Vue Green Line.
In 2008, General Motors committed to engineering half of its manufacturing plants to be landfill-free by recycling or reusing waste in the manufacturing process. Continuing its environmental-conscious development, GM started to offer the 2-mode hybrid system in the Chevrolet Tahoe, GMC Yukon, Cadillac Escalade, and pickup trucks.
In late 2008, the world's largest rooftop solar power installation was installed at GM's manufacturing plant in Zaragoza. The Zaragoza solar installation has about 2,000,000 square feet (190,000 m2) of roof at the plant and contains about 85,000 solar panels. The installation was created, owned, and operated by Veolia Environment and Clairvoyant Energy, which leases the rooftop area from GM.
Chapter 11 bankruptcy and bailout
In March 2009, after the company had received $17.4 billion in bailouts but was not effective in a turnaround, President Barack Obama forced the resignation of CEO Rick Wagoner.
General Motors filed for a government-backed Chapter 11 reorganization on June 8, 2009. On July 10, 2009, the original General Motors sold assets and some subsidiaries to an entirely new company, including the trademark "General Motors". Liabilities were left with the original GM, renamed Motors Liquidation Company, freeing the companies of many liabilities and resulting in a new GM.
Through the Troubled Asset Relief Program, the United States Department of the Treasury invested $49.5 billion in General Motors and recovered $39 billion when it sold its shares on December 9, 2013, resulting in a loss of $10.3 billion. The Treasury invested an additional $17.2 billion into GM's former financing company, GMAC (now Ally Financial). The shares in Ally were sold on December 18, 2014, for $19.6 billion netting the government $2.4 billion in profit, including dividends. A study by the Center for Automotive Research found that the GM bailout saved 1.2 million jobs and preserved $34.9 billion in tax revenue.
General Motors Canada was not part of the General Motors Chapter 11 bankruptcy.
Post-reorganization
In June 2009, at the request of Steven Rattner, lead adviser to President Barack Obama on the Presidential Task Force on the Auto Industry, Edward Whitacre Jr., who had led a restructuring of AT&T, was appointed as chairman of General Motors. Whitacre was tasked with overseeing GM's emergence from bankruptcy and downsizing its sizable number of brand marques, many of which had produced chronic losses even before the recession began. In July 2009, after 40 days of bankruptcy protection, the company emerged from the government-backed General Motors Chapter 11 reorganization.
As mandated by its bailout agreement, GM began the process of shedding its poorest-performing brands in June 2009: Hummer, Saab, Saturn, and Pontiac. An October 2009 agreement to sell the Hummer brand to China-based Sichuan Tengzhong Heavy Industrial Machinery Company Ltd. and a group of private investors fell through three months later, resulting in GM seeking a new suitor. American company Raser Technologies, along with several others, expressed interest in buying the company, but none of the proposed acquisitions came to fruition, and in April 2010 GM said it was officially shutting down the Hummer brand. Similarly, GM's efforts to sell its Saturn division yielded an early suitor. In June 2009, GM announced that the Saturn brand would be sold to the Penske Automotive Group. The deal fell through, however, and GM declared the brand defunct in October 2010. While GM agreed to shed its underperforming Pontiac brand as part of its bailout agreement, the company explicitly opted not to sell it to another company. The last Pontiac was built in January 2010.
GM was more successful in its attempts to sell Saab Automobile: the company closed a sale to Dutch automaker Spyker Cars in February 2010. Saab continued to perform poorly under Spyker's management, however, and in 2012 the Saab division declared bankruptcy.
From Wikipedia’s article on General Motors, shared under CC BY-SA 4.0.8