By David Glenn Cox
It was Durant who invented the modern car company, different models in
different price ranges with different features all made with basically
the same parts. The problem was Durant was a victim of his own success,
he kept on buying more and more suppliers and car companies that added
little to the GM line up. He bought thirteen different car companies
and ten parts companies and then the sales began to slump. GM would
need $12 million to keep from shutting its doors, and the bankers
agreed to the loans one condition, that Billy Durant give up his
control of GM.
On November 15, 1910 Durant announced his
retirement and for most people that would be the end of the story, but
Billy Durant was not most people. The bankers had no better luck
managing GM than Durant had. They fought a nightmare of duplicate
companies producing duplicate components and like most bankers they
moved to cut the large items rather than the million small items. They
reasoned that GM made more money selling big cars than they did selling
small cars, so they slashed smaller models in favor of bigger ones. The
Buick 10 was cancelled; it was a small four-passenger runabout designed
to compete with Ford’s Model T.
In 1911, Buick sales were down
50%. Their factories were closing, their workers were laid off by the
thousands, when along came Billy Durant. You remember Billy, don’t you?
Durant announced to the world that he was founding a new car company
and its models would be designed by one of the foremost auto racers in
the world, Louis Chevrolet. Durant bought one of the shuttered Buick
factories and staffed it with former Buick workers and began building
the Chevrolet 490. The 490 was actually the Buick model 10 which had
been cancelled by the bankers.
The 490 earned its name from the
fact that it cost $490, fifty dollars more than a Ford Model T, but
offering an electric starter and electric running lights and a spare
tire. By 1915 Chevrolet was selling more than 13,000 cars a year, but
Durant was still unhappy. He had begun to acquire large blocks of GM
stock, and he encouraged his friends to buy GM stock as well. In
September of 1915 Durant showed up unannounced at the annual
shareholder’s meeting with GM’s Board of Directors.
Like a scene
out of a Hollywood movie, Durant was followed into the room by several
assistants carrying bushel baskets full of GM stock certificates.
Approaching the board he announced, “Gentleman, I now control this
company.” He managed to stay until 1920 when he was again forced out
because of his penchant for buying up companies. Through pluck and
guile, with hard work and genius, Billy Durant had built General
Motors. But by 1920 he had again driven GM deep into debt as sales
fell, and so again, Durant resigned.
In 1921 Durant filed papers
of incorporation for the Durant Motor Company and again he would
compete by building small cars against the Ford Model T. The Durant
Star went head-to-head with the Model T, while the Durant Six and the
Flint Model went head-to-head with Chevrolet and Buick. But the company
folded in the depths of the depression in 1933. Durant had been one of
the multimillionaires who had thrown their own fortunes into the stock
market, trying to stop the crash. Durant listed his personal assets at
$250. He ended up owning a restaurant and a grocery store, which he
operated out of a former Oldsmobile showroom. Durant being Durant, he
later added bowling alleys to his conglomerate holdings.
the shaky partnership between the Dodge Brothers and Henry Ford had
become insufferable to Ford. No longer having any cash problems, Ford
resented the brother’s share of his company. Ford built his own parts
and manufacturing factories to eliminate his need of the Dodges. That
was fine with the brothers, for they, too, were rolling in cash, Ford’s
cash. Since they no longer made parts for Ford, and having the tooling,
the factories and the workers, the Dodge brothers conceived of their
own car, created from the suggestions which Ford had rejected.
new Dodge featured a speedometer, electric lights and a gas gauge. The
Ford required you to put a stick in the gas tank to see how much fuel
was left in it. Ford did not think it at all funny that his stock
dividends were being used to bankroll his competition. When the Dodges
offered to sell out to Ford, in a fit of stubbornness he refused.
Instead Ford announced in 1916 that the company would no longer pay
dividends; the company would plow all its profits back into the company.
was an absurd concept; the Ford Motor Company couldn’t spend all the
money they already had on hand. Like Durant, Ford, by controlling his
suppliers and mass producing the same model year after year, saw
manufacturing costs fall to ridiculous levels. Even at Ford’s
five-dollar-a-day wage, if twenty extra men could turn out ten extra
cars, it was more than cost effective.
The Dodges sued and the
court ordered Ford to pay $19 million in back dividends, but since
Henry Ford was the majority stockholder, most of the money went
straight back to him. He then announced that he was retiring and turned
the company over to his son, Edsel. The next year a Los Angeles
newspaper broke the story that Ford was planning to open a new car
company hiring 50,000 workers and selling cars for between $250 and
The Dodges had had enough. If Ford actually went through
with the scheme it would bankrupt the Ford Motor Company as well as
Dodge. The Dodges sold their stock for $25 million and all the rumors
of Ford’s new car company quickly evaporated. In 1920 Horace Dodge fell
ill with pneumonia; John Dodge fell ill ten days later, and both men
passed away from the world that they were integral in creating. Their
widows sold out to the bankers and the bankers sold out to Walter
Chrysler in 1929.
Walter Chrysler, like the Dodge Brothers, had
worked around steam engines. An executive at GM asked Chrysler if he’d
ever given any thought to manufacturing automobiles. Charles Nash, then
the president of Buick, made Chrysler his production chief. After the
ouster by the banks of Billy Durant, it was Chrysler who was seen as
having the closest ties to the bankers. Chrysler revolutionized the way
cars were manufactured, by cutting costs and streamlining production,
and then succeeded Nash as president of Buick. So when Durant reclaimed
ownership of GM, Walter Chrysler began cleaning out his desk and
submitted his resignation to Durant.
Where a vindictive man
might see this as a chance to settle scores, Durant instead pleaded
with Chrysler to stay on. He offered him the unheard of salary $10,000
a month for three years, plus a half million dollar bonus per year,
plus $500,000 worth of GM stock. Durant gave Chrysler full control of
Buick and Chrysler answered to no one except Durant. After three years
Chrysler was one of the richest men in the automotive industry.
purchase of Dodge in 1929 was seen as tough luck by many, but Chrysler
managed to move the company forward and pay down the company’s debt,
and he built the Chrysler Building in New York while he was at it. As a
young man Walter Chrysler was considered an expert at tuning locomotive
engines. He never lost his love of engines; where he gladly turned over
day-to-day control of the company in 1936, he still followed the engine
development program almost daily.
Henry Leland had left Cadillac
after the GM purchase. He was encouraged by friends and investors to
found a new car company. Using his prestige, Leland sought to design a
new American luxury car, a car that would rival the Rolls Royce; a car
he named after his favorite President, Abraham Lincoln. Sadly, for all
his innovation on the factory floor and mechanical know-how, the new
cars were seen as behind the times in their styling. The company only
lasted five years under Leland’s leadership. Henry Ford then purchased
Lincoln, some said just to spite Leland. He then gave the company to
his son Edsel, like a toy from a cereal box.
They created an
industry in Detroit second to none and it reached out and touched all
aspects of America. Detroit needed steel from Pittsburgh and Chicago
and coal from Kentucky and West Virginia and rubber from South America
to make tires in Ohio. Moving all of these goods meant more trains for
the railroads. The lure of better-paying industrial jobs lured farm
boys from across the country to the busy streets of Detroit. The loss
of farm labor was made up for by using more machinery, the tractor, the
pump and the generator, which in turn also created more industrial
jobs, which attracted even more farm labor.
Roads were paved,
highways were built, liberating people who, a generation before, had
never gone more than twenty-five miles from their homes. Women
especially were freed from lives trapped in farmhouses. The first Olds
with an automatic transmission was advertised as a “ladies car.” Just
as suddenly, millions who had lived too far from town to further their
education’s were now able to do so. A renaissance occurred in American
life, from an agrarian to an industrial society, all in the space of a
generation because of a small group of tinkerers and machinists and
businessmen from Detroit.
From that time forward Detroit became
the symbol of the great melting pot and the American dream. African
Americans from the South, immigrants from across the world made Detroit
home. The UAW was born in Detroit, free-working people fighting for the
right to organize. They fought all the powers of heaven and Earth, the
government, and the police. They put their lives on the line and in
some cases forfeited them for the dream of a middle class life.
the 1960’s, racial injustice combined with police brutality in the form
of the “Tac Squad” and the “Big Four” police units, boiled over into a
riot in Detroit the likes of which hadn’t been seen on American streets
since the Civil War. Forty-three people dead, almost twelve hundred
injured and seven thousand arrests. It was not a noble cause, but it
was necessary as the poor and the oppressed rebelled against their
We, the people of the United States and
the world, owe a debt of gratitude to the ghosts of Detroit. For if
America has a heart, Detroit is where we check our pulse. Detroit was a
city built on autos that built a nation built on autos. Autos built by
blue collar, working-class folks who believed in the American dream as
the dream of prosperity through hard work.
I could go on and
on with page after page of all that has been done wrong, but I’ll stop
here with all that Detroit has done right. For all that she has given
to the world, she’s a city that deserves better from a country that has
forgotten its heroes and its roots, and sees them only as ghosts of the
dead. It is policies that have put us where we are. The brains the
hands and the spirit which changed the world are still there waiting to
be tapped again.
(photo by TooLoose-LeTrek)
Ben Cohen is the editor and founder of The Daily Banter. He lives in Washington DC where he does podcasts, teaches Martial Arts, and tries to be a good father. He would be extremely disturbed if you took him too seriously.