Hearing that we, the American taxpayers, are now the majority stakeholders in General Motors is a bit like hearing we’ve just inherited a general store from an uncle we never knew in a town we’ve never visited. There’s already a shopkeeper in place, so we don’t really have to “do” anything, but it might be nice to know a little something about our new acquisition.
We all know the story of Henry Ford and his assembly line, but what is there to know about General Motors?
The company’s founder, William C. Durant, was running the nation’s largest horse drawn carriage company, but he soon realized the future lay in automobiles so he began acquiring car manufacturing companies. In 1904 he took over the Buick Motor Company, followed by Oldsmobile in 1908 and Cadillac in 1909, and thereby, General Motors was born.
Durant oversaw some good years at General Motors, but the true growth of the company occurred under an engineer, Alfred P. Sloan, who became president of the company in 1923. By then General Motors sold Buicks, Pontiacs, Chevrolets, Oldsmobiles, and Cadillacs, and Sloan proved to be a marketing genius. He promoted General Motors by promising, “A car for every purse and purpose.” (Sloan’s tenure with the company permitted him to achieve great personal wealth, and his significant financial contributions are noted by several major institutions that bear his name: Memorial Sloan-Kettering Cancer Center and the Sloan School of Management at MIT, to name just two.)
There were several key elements that led to General Motors’ early success. To begin with, the company countered Ford’s reasonably-priced black “cookie cutter” car by introducing automobiles in a variety of makes, styles, colors, and an ever-changing choice of features. GM made buying a new car a status symbol–a portable, personal sign of wealth. For a look at some of the incredible designs, visit the General Motors Heritage Center.
But of course, people needed a little help paying for the more expensive GM cars. For that reason, General Motors created GMAC (General Motors Acceptance Corp) to provide installment plans for car buyers. This was to change American shopping habits from that time going forward. Today, time payment plans on everything from cars to credit card bills are the norm.
In 1953, then-GM president Charles Wilson, was asked to appear before Congress and his statement on behalf of his company was distilled by the press to be “What’s good for General Motors is good for the country.” At no other time than 2009 is it more important that this be true.
But on a “fast fact” note, let’s say you just need one quick thing to add into a conversation about GM. You might throw in that it was the first company to create cars with fins–the 1948 Cadillac.
Hmmm… maybe the answer to their problems today is little fins on a hybrid?