Home | Business News | Browse by Publication | C | Canada and the World Backgrounder

Motown misery: the world's biggest car maker, General Motors, is sick--very sick; some have even mentioned the bankruptcy word.

Article Excerpt
At its peak, General Motors sold one out of every two cars and trucks in the United States. That was in 1962. Today, the company holds just a quarter of the market and its grip on that substantial slice is slipping.

How could the giant have been brought so low? It's a story that's been developing for decades. Put simply, the company makes vehicles people don't want in an industry that produces more units than it can sell.

Billy Durant might understand this rise and fall in fortunes. Having become rich making buggies, Mr. Durant bought the ailing Buick Motor Car Company in 1904. In 1908, he folded Buick into another company and called the result General Motors. But, within two years, the company was in financial trouble. The banks took over and booted Mr. Durant out. Quickly, he and Louis Chevrolet started up the Chevrolet Company. Billy Durant organized a merger with his old company and, in 1915, he was back in charge of General Motors. He bought up many small car manufacturers, among them the McLaughlin Motor Car Company. Colonel Sam McLaughlin had started making cars in Oshawa, Ontario in 1907. In 1918, Col. McLaughlin sold out to GM and became President of General Motors Canada. But, it all turned sour again for the colourful Billy Durant; in 1920, GM said goodbye to him for the final time. The self-made, and then unmade, multi-millionaire died in poverty in 1947.

Under the leadership of Alfred Sloan, General Motors started to expand worldwide. Mr. Sloan came up with the idea of offering an annual model and different lines of cars at different prices. Consumers liked the idea that they could trade up to a bigger and more expensive car. GM quickly overtook Ford as the biggest car manufacturer.

World War II was good to GM. The company made a lot of the weaponry for the allies; it also made warplanes and trucks for Nazi Germany.

Writing in The Washington Post in 1998, Michael Dobbs pointed out the irony: "When American [soldiers] invaded Europe in June 1944, they did so in jeeps, trucks, and tanks manufactured by the Big Three motor companies (GM, Ford, and Chrysler) ... It came as an unpleasant surprise to...

View this article FREE - Now for a Limited Time, try Goliath Business News
Free for 3 Days!