Читать книгу The Fall of Detroit - Dmitry Nazarov - Страница 4

William Crapo Durant, the American entrepreneur who founded the General Motors and Chevrolet automobile companies

Buick had already existed by that time.

It was a successful brand, in general. It wasn’t located in Detroit but it was a successful car company.

Durant wasn’t as famous as Henry Ford. Although, a few years later, he created a brand you definitely heard about. It was such a small, low-profile company named General Motors.

Durant wasn’t an inventor, he was an entrepreneur, pure and simple.

He was trying to sell things since he was a kid: cigarettes, papers, shoes. Then, it came to real estate.

And so, a result of his upbringing was the fact that, in 1886, he had his own factory which produced running gear for bullock carts. He produced wagon wheels, so to speak. And actually, his mindset predetermined all the way of General Motors development, and of whole the car industry.

Perhaps, I will say something not so obvious to you, but GM has never been a car manufacturer. GM is just a managing company.

And who were those car makers? Chevrolet, Opel, GMC, Cadillac, the very same Buick. GM was just an office with managers.

When Durant began to manage the Buick, the company was doing poorly. They were just producing something within some scope, and they were not highly regarded.

But within 4 years, Durant made Buick to an industry leader, and in 1908, Buick was a bestseller.

Although, Ford Model T was also born in 1908, it didn’t manage to move his competitor yet.

The main difference between Durant’s and Ford’s models of how they would run their businesses was the following; Ford placed all his bets on one model, and Durant decided that each manufacturer had to have a wide range of products. It had to be like that so that each customer could find something fitting for them.

In 1900s, that wasn’t common practice. Actually, they were both right in their own way.

Ford’s legacy is the conveyor belt method of car manufacturing, and the fact that all manufacturers put their cars together like this.

And Durant’s legacy was the business model. The most modern companies and dealers work by the patterns which were invented by Durant. That’s why he is just as significant for car industry as Henry Ford himself.

And so, it was 1908. Buick was sitting pretty. Durant founded the managing company General Motors. He gave all his shares and all the control to this company, invited a bunch of investors and began to buy everything that moves and everything he saw. Oldsmobile, Cadillac, Oakland – our modern Pontiac, Rapid Motor Vehicle – our modern GMC Truck.

Beside car manufacturers, GM began to buy all manufacturers of components and everything that was somehow connected to the car industry.

They even almost bought Ford at that time, in 1908—1909. But investors didn’t approve the deal.

They thought it would be risky to be monopolists in every corner. They could have some problems with government regulations etc.

And so they decided that Ford may live peacefully and put together his cars.

But those politics didn’t earn huge profit.

GM had less sales than Ford. Shareholders and investors wanted their dividends for invested money. But Durant was spending all the profit by buying more and more new companies.

That’s why shareholders and investors were festering resentment.

At some point, they gathered, they pondered, and they bought all Durant’s shares and threw him out of the company in 1910.

But Durant wasn’t upset; he took the moustached racer Louis Chevrolet to found – oh my God, how unexpected! – Chevrolet.

And in this company, they decided to focus on the public sector, on inexpensive cars of high quality to move into Ford Model T’s consumer section.

And they made it.

Chevrolet began to evolve very fast by taking market sectors for itself, and Durant was sitting pretty, again. While being a clever wheeler-dealer, he began to change Chevrolet’s shares for those of GM. He sold them here, he bought them there – and there he was, on the GM board again.

Plus, he borrowed money from investors, bought out everything that was left in GM, and, by using every piece of the company’s money, he began to buy everything he could, systematically.

In 1920, the car sales fell down significantly, and if you’d attack the market like Durant, it could lethally threaten the company. Suddenly, you could have some huge financial holes, something would absorb something, and that would be it.

All investors gathered once again, pondered once again, did the math – and they decided that they didn’t need Durant, again, and they threw him out of the company for good.

But GM still exists today, it had become the second pivotal part, in the foundation of Detroit’s future. And so it appears on our list here.

While Durant and Chevrole were tinkering their products in garages, in 1911, some Walter Percy came to Buick, and his surname would become a household name. Chrysler. He came to work as a production manager for Buick cars.