History/News/Commentary from K. Scott Teeters

General Motors Tries to Buy Ford… In 1909! WHAT???

Dateline: 11.7.11

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.

Here's William Crapo Durant in his first car, a 1906 Buick Model F.

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.

Henry Ford and his Model T. This car is cosidered by many automobile historians as the most important automobile ever made.

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.

Here's Louis Chevrolet doing what he loved best, RACING! Many years later, race cars with his name would at one time or another, dominate nearly every form of auto racing.

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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5 Responses to General Motors Tries to Buy Ford… In 1909! WHAT???

  • Thank God it never happened! Then everything would be Government Motors. Ford stands alone. Chevy should have gone the way of Studebaker.

  • Hi Tom,
    Thanks for your comment. I have observed that ALL of the surviving car makers have laid MASSIVE eggs many times. Ford walked away from the 2-seater T-Bird before it even had a chance. The Mustang was amazing, then they let it get big, then tried to pass off a Pinto as the Mustang II. The recent retro Mustang is very cool, but it’s already drifting away into being something else. Chrysler had a bunch of flops too, but they gave us Mini Vans, which are way better than station wagons.. And GM gave us the dreadful Corvair, the Vega, the Pontiac Aztek, and a few others I’ve happily forgotten. But then again, GM gave us the current batch of outstanding Cadillacs, the Corvette, and Camaro. And lets not forget the all-time classic ’57 Belair that they made into something else after only one model year! I’ve worked for Tyco Toys and Mattel Mt. Laurel as a designer and can tell you that at the top levels, they’re all scared to death and “guess” most of the time. The movie business is the same too.

    So, when they hit a home run, we can all cheer for the home team. And when they strike out (such as killing the Fiero after they finally got it right), we need to be like Babe Ruth and just forget about the strikeouts. It’s all fun stuff! – Scott

    PS – I’ll be doing a post about how the Chevrolet brothers got the short end.

  • Let us not forget that GM would lay the biggest egg of all when it made the decision to SCRAP THE EV1 all electric car back in the late 1980’s

    Everyone of the lease owners (all 33,000) of them begged GM to allow the EV1 to be bought. But GM in their bankrupt wisdom refused to sell any working EV1.

    Only two survived (one in a private collection, and that one was disabled by GM so that it could never be operated on the road again) and the other is in a car museum, it also has been rendered useless.

    Image if GM had listened to its customer base instead of big oil?
    WE would now be in much better shape financially, socially and internationally as in no oil wars and a government that was more concerned about the 99% then the 1%

  • Hi DigitalGravy! Love the handle, by the way. I’m with you on GM’s boneheadedness on some issues. I’m sure you say, “Who Killed The Electric Car.” You should check out, “Taken For A Ride” about how GM, Standard Oil (the Rockefellers), and Firestone conspired to buy out and destroy the electric trolly system in Los Angeles. Same story. If they want something squashed, BAM! That’s it.

  • Or, it could have been Ford that took a dive. When it comes to corporate warfare, one never knows who things will turn out. – Scott

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