William Durant once got approval from GM’s board of directors to buy Ford!
2012 is Chevrolet’s 100th birthday year and unless you’ve been in a coma, you could not have missed the celebration. Last summer we told you about the most popular Chevrolet of all time contest. Sorry plastic fantastic fans, the Corvette fell in the 3rd round of competition and the ‘69 SS/RS Camaro was the eventual winner. Then on November 3, 2011 media outlets celebrated Chevrolet’s 100th birthday with feature stories and slide shows. (see special slide show link at the bottom of this post) Chevrolet commercials have been featuring the 100th birthday celebration, as well as car magazines. And GM’s performance flagship car, the Corvette, will offer buyers the Centennial Edition option for 2012. Yes, it’s a heady time for Chevrolet.
But on page 14 of the December 2011 issue, Motor Trend magazine dished up what I thought was a tasty trivia tidbit of seldom talked about General Motors history. Referencing Lawrence R. Gustin’s book, “Billy Durant, Creator of General Motors,” MT dropped this fascinating factoid.
In the early days of the American car industry, there were hundreds of car companies, most of which have been long forgotten. Many of the brand names that are still with us were once shabby little enterprises. Even though it wasn’t the computer age, “business is business” and a feeding frenzy was going on. Car companies were buying up other car companies that were then bought up by bigger or more aggressive car companies. There’s always a bigger fish, right?
William Crapo Durant (yes, that was his middle name) worked out a deal to buy the Ford Motor Company for $2 Million in cash, plus an additional $4 Million paid out over three years, at 5-percent interest. Billy pitched the deal to his company’s board of directors on October 26, 1909 and they approved, IF he could get the financing. But the banks said, “NO!” It probably seemed way too risky with possible cost overruns, etc.
Then the following year after a banking panic, GM’s board gave Durant the boot and let the bankers take over General Motors! Sounds kind of familiar, doesn’t it? Out of a job, Durant, along with investment partners William Little (of the Little Motor Car Company) and Durant’s son-in-law, Dr. Edwin R. Campbell, teamed up with race car driver Louis Chevrolet and incorporated Chevrolet on November 3, 1911. Like a bad marrage, Louis and Billy parted company in 1915. Durant took the profits from the Chevrolet Company and bought the controlling shares in his old company, General Motors. Then in 1917, Durant folded the Chevrolet company into General Motors.
Louis Chevrolet took his cashed out company holding and went back to his first love, auto racing and drove in four Indy 500 races, with his best finish in 1919 in 7th place. By the end of 1929, Louis lost his fortune in the stock market crash and eventually got a job as an assembly line mechanic in of all places, Chevrolet. I know, hard to imagine! When he died on June 14, 1941, he was nearly penniless.
What an odd working out of events. While Louis Chevrolet’s story is relatively well known, the Durant attempt to buy Ford was a story that I had never heard. Obviously, swept into the dust bin of American coprorate history. Considering the intense rivalry between Chevrolet and Ford that went white hot with the release of the ‘55 small-block Chevy engine, the notion of Ford having been nearly purchased in 1909 by General Motors is staggering! It’s hard to fathom the lineup of GM cars that might have read, “Chevrolet, Pontiac, Buick, Oldsmobile, Cadillac, GMC, and Ford(?)”
If Ford had been folded into the General Motors company the way Chevrolet was, would there have ever been a Ford Model T? Probably not. And what would have become of Henry Ford? Would he have taken his payout and retired, and possibly lost everything the way that Louis Chevrolet did in ‘29? Would the classic Flathead Ford engine become the Flathead GM engine or Flathead Chevy engine???
Hard to tell and interesting to ponder. One thing is for sure. Modern corporate warfare was just as nasty, dirty, and viscous back then, as it sometimes is today. It just happens faster today, thanks to electronics. But the basic rule of the corporate jungle is still the same. “Business is Business!” – Scott
PS – MSNBC dished up a nice selection of classic images to celebrate Chevy’s 100th birthday. Check out the slide show HERE.
PSS – Here’s an interesting business factoid. Before becoming one of the Captains of Industry, In 1901 Henry Ford went BANKRUPT because Henry was more focused on engineering rather than marketing his cars. Like today, he wasn’t the only one. Here’s an interesting list of other famous household names that went belly-up at one point in their business carreer.
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