GM Looks for Buzz
With Its Electric Volt
Auto Maker Hopes
High-Mileage Car
Will Repair Image
Cobbled together by a brash entrepreneur starting in September 1908, with Buick as its foundation, followed by Oldsmobile, Cadillac and Chevrolet, GM overcame improbable odds and emerged among hundreds of automotive brands and companies in the early years of the 20th century.
Henry Ford invented the mass assembly line and put basic, affordable transportation -- the Model T -- in the hands of millions. But GM took the bold next steps with innovations of all types.
"After the Model T, GM predicted that more power, more styling, more comfort and more prestige would sell en masse," said Bob Casey, curator of transportation at the Henry Ford Museum in Dearborn. "They created the modern car
business to do just that -- offer more choices. And, remarkably, they continued to do it successfully for decades.
"We are a nation obsessed with the new. That GM has survived 100 years says they have done a lot of the right things for a long time."
It was a GM engineer from Dayton, Ohio -- Charles Kettering -- who invented the electric self-starter in 1912 that replaced the cumbersome hand crank and opened motoring to the masses. GMAC -- the first captive finance company started by an automaker -- began offering car loans in the early 1920s, allowing more people to buy on credit and start driving immediately.
And GM first championed the annual model year change in the 1930s, giving consumers another reason to shop new car showrooms more frequently.
And, of course, who can forget the stately Cadillacs, rocket V-8 engines, Corvettes, tail fins and muscle cars that captivated Americans.
Over time, as America's love affair with the car grew, "as big as a Buick" and "the Cadillac of ..." became part of the American lexicon.
"Without question, for most of the 20th century, GM pioneered and defined the quintessential American conglomerate," said Michael Marsden, dean of St. Norbert College in De Pere, Wis., and an expert on the automobile and American culture.
"They set the pace on nearly every front -- perfecting vertical integration, adopting central management and financial control, creating consumer demand through marketing innovations, and styling that captured the imagination of an optimistic public in profound ways."
It was a rocky beginning when GM founder William "Billy" Durant went on a shopping spree, snapping up car companies and parts makers and creating a giant automotive bureaucracy overnight.
It was the first "keiretsu," the term that management expert Peter Drucker would later coin to describe a Japanese network of supplier and manufacturing operations that maintain separate identities but fall under the same family.
GM failed to grow as fast as the overall auto industry in its early days -- burdened by acquisitions, debt and enormous competition.
But after 1918, the company grew faster as tighter management oversight and financial controls took hold. Backed by bankers and remarkable, astute leadership, it survived a brush with bankruptcy in the early 1920s and had surpassed Ford Motor Co. by the late, prosperous 1920s.
By 1928, GM's net profit margins had reached an all-time high of 18.9 percent.
It became the industry's undisputed intellectual and product powerhouse with designers, researchers and engineers blazing new paths in styling, marketing, technology, safety and the environment.
"Along the way, GM management made critical investments -- establishing the industry's first styling department, embracing customer-based market research, establishing the first automotive proving grounds and first research department," said Charles Hyde, a history professor at Wayne State University.
Under longtime leader Alfred Sloan, GM recognized the needs and buying power of America's growing households -- and offered a model for every income in the 1920s and 1930s. At the bottom of the marketing ladder was Chevrolet, followed in price by Pontiac, Oldsmobile, Buick and finally, Cadillac -- the flagship.
While it was brilliant marketing and design of cars and trucks that allowed GM to become the largest company ranked by revenues for years, its reach was felt way beyond the open road. At one time, the company owned Frigidaire, built diesel locomotives and was a leading defense contractor.
Worried that the airplane would become a personal mode of transportation, management decided to become an early investor in America's aircraft industry. GM's Delco light plants helped electrify rural American homes and farms starting in the 1930s. GM engineers created the gyroscope that guided man to the moon, as well as the lunar rover that later allowed man to traverse the moon. More recently, it played a role in the launch of satellite television and radio.
Under the microscope
With its earnings power and market influence, GM also drew scrutiny. After the sit-down strikes of 1937 in Flint, GM acquiesced and recognized the bargaining rights of hourly employees, and the United Auto Workers union was born. With GM's manufacturing footprint spreading far and wide, the union would secure unprecedented wages and benefits that would drive economic prosperity across America.
Flint; Dayton, Ohio; Anderson, Ind.; and other cities came to be known as "GM towns."
Critics say the company became too smug and complacent, starting in the 1960s -- when its market share reached a zenith of 52 percent -- and that it didn't continue to innovate.
"Sloan's successors became GM caretakers rather than risk takers," Hyde said.
In recent decades, GM management responded too slowly or failed to anticipate major shifts in the market such as the popularity of the minivan in the 1980s and the sport utility vehicle boom in the 1990s.
Looking ahead
GM's outlook is unsettled and eerily similar to that of the turbulent early 1900s, when the company overcame skittish bankers, high-profile management shake-ups and unrelenting competition.
GM's biggest rivals are more likely to come from Asia and Europe now; in its early days there were home-grown Lincolns, Packards, and Hudsons. Since the early 1990s, the company has repeatedly downsized and restructured to reduce waste and better capitalize on its global reach and economies of scale.
It has killed off brands -- Oldsmobile, for one, and launched new ones, such as Saturn, to counter falling market share and competition.
With its U.S. market share hovering just above 20 percent, GM is struggling to support even more brands -- Chevrolet, GMC, Saturn, Pontiac, Buick, Cadillac, Saab and Hummer -- than it did when it commanded more than 50 percent of the market a half-century ago.
Faced with record gasoline prices, a housing slump and growing unemployment, the U.S. marketplace has suddenly turned away from GM's core truck and SUV lineup and seems unwilling to sample its cars despite great improvements in independent quality surveys.
The company is responding with another round of job and spending reductions, benefit cuts, plant closings and the elimination of its dividend for the first time in 88 years.
GM has faced crises before -- a brush with bankruptcy in 1920, and during the Arab oil embargo and gas shortages of the 1970s, when the U.S. market underwent a historic shift away from rear-wheel-drive sedans, a GM staple, to smaller vehicles.
Today, it is staking its future on overseas markets in China, Russia, India and Eastern Europe, while redoubling efforts to win back customers and generate sales growth in the United States. And it is banking on a new generation of clean power sources to set it apart from rivals.
But the times are different and the challenges seem more daunting. GM's stock price no longer commands respect on Wall Street. Its credit rating has been slashed to junk status -- depriving it of the affordable capital it relied on in the past to grow. Toyota Motor Corp. and Honda Motor Co. are considered leaders in developing alternative power sources.
"Leaders and innovators don't keep an advantage for long," Hyde said. "Look at how far GM has fallen."
GM founder Billy Durant discovered and believed that great periods of change also present great opportunities, and GM management is re-examining his famous playbook.
"We intend to be the global leader in a broad range of advanced propulsion technologies, which will be the key to addressing the issue of energy supply, energy security and CO2 emissions," GM Chairman Rick Wagoner recently told the Flint Journal, where Durant created GM. "GM's centennial is an opportunity to rededicate ourselves to leading the industry in meeting these challenges."
The next 100 years will determine if GM is right, and history can be repeated.
GM Seeks Buzz With Electric VoltGM plans to officially unveil its most important model in decades -- and possibly the key to its survival.
*****
Tuesday, September 16, 2008
A century of General Motors
Legacy of innovation
David Phillips / Special to The Detroit News
Few major companies endure the rigors and shocks of American capitalism for decades -- let alone survive long enough to mark their centennial. But GM is no ordinary American company.
With GM facing severe financial woes, waning market share and the prospect of losing its global sales crown for the first time in almost 80 years, it is easy to dismiss its influence at its 100th birthday. Some even question GM's survival.
Yet for much of the past century, you couldn't overstate GM's vast reach and impact on American life and business.
Cobbled together by a brash entrepreneur starting in September 1908, with Buick as its foundation, followed by Oldsmobile, Cadillac and Chevrolet, GM overcame improbable odds and emerged among hundreds of automotive brands and companies in the early years of the 20th century.
Henry Ford invented the mass assembly line and put basic, affordable transportation -- the Model T -- in the hands of millions. But GM took the bold next steps with innovations of all types.
"After the Model T, GM predicted that more power, more styling, more comfort and more prestige would sell en masse," said Bob Casey, curator of transportation at the Henry Ford Museum in Dearborn. "They created the modern car business to do just that -- offer more choices. And, remarkably, they continued to do it successfully for decades.
"We are a nation obsessed with the new. That GM has survived 100 years says they have done a lot of the right things for a long time."
It was a GM engineer from Dayton, Ohio -- Charles Kettering -- who invented the electric self-starter in 1912 that replaced the cumbersome hand crank and opened motoring to the masses. GMAC -- the first captive finance company started by an automaker -- began offering car loans in the early 1920s, allowing more people to buy on credit and start driving immediately.
And GM first championed the annual model year change in the 1930s, giving consumers another reason to shop new car showrooms more frequently.
And, of course, who can forget the stately Cadillacs, rocket V-8 engines, Corvettes, tail fins and muscle cars that captivated Americans.
Over time, as America's love affair with the car grew, "as big as a Buick" and "the Cadillac of ..." became part of the American lexicon.
"Without question, for most of the 20th century, GM pioneered and defined the quintessential American conglomerate," said Michael Marsden, dean of St. Norbert College in De Pere, Wis., and an expert on the automobile and American culture.
"They set the pace on nearly every front -- perfecting vertical integration, adopting central management and financial control, creating consumer demand through marketing innovations, and styling that captured the imagination of an optimistic public in profound ways."
It was a rocky beginning when GM founder William "Billy" Durant went on a shopping spree, snapping up car companies and parts makers and creating a giant automotive bureaucracy overnight.
It was the first "keiretsu," the term that management expert Peter Drucker would later coin to describe a Japanese network of supplier and manufacturing operations that maintain separate identities but fall under the same family.
GM failed to grow as fast as the overall auto industry in its early days -- burdened by acquisitions, debt and enormous competition.
But after 1918, the company grew faster as tighter management oversight and financial controls took hold. Backed by bankers and remarkable, astute leadership, it survived a brush with bankruptcy in the early 1920s and had surpassed Ford Motor Co. by the late, prosperous 1920s.
By 1928, GM's net profit margins had reached an all-time high of 18.9 percent.
It became the industry's undisputed intellectual and product powerhouse with designers, researchers and engineers blazing new paths in styling, marketing, technology, safety and the environment.
"Along the way, GM management made critical investments -- establishing the industry's first styling department, embracing customer-based market research, establishing the first automotive proving grounds and first research department," said Charles Hyde, a history professor at Wayne State University.
Under longtime leader Alfred Sloan, GM recognized the needs and buying power of America's growing households -- and offered a model for every income in the 1920s and 1930s. At the bottom of the marketing ladder was Chevrolet, followed in price by Pontiac, Oldsmobile, Buick and finally, Cadillac -- the flagship.
While it was brilliant marketing and design of cars and trucks that allowed GM to become the largest company ranked by revenues for years, its reach was felt way beyond the open road. At one time, the company owned Frigidaire, built diesel locomotives and was a leading defense contractor.
Worried that the airplane would become a personal mode of transportation, management decided to become an early investor in America's aircraft industry. GM's Delco light plants helped electrify rural American homes and farms starting in the 1930s. GM engineers created the gyroscope that guided man to the moon, as well as the lunar rover that later allowed man to traverse the moon. More recently, it played a role in the launch of satellite television and radio.
Under the microscope
With its earnings power and market influence, GM also drew scrutiny. After the sit-down strikes of 1937 in Flint, GM acquiesced and recognized the bargaining rights of hourly employees, and the United Auto Workers union was born. With GM's manufacturing footprint spreading far and wide, the union would secure unprecedented wages and benefits that would drive economic prosperity across America.
Flint; Dayton, Ohio; Anderson, Ind.; and other cities came to be known as "GM towns."
Critics say the company became too smug and complacent, starting in the 1960s -- when its market share reached a zenith of 52 percent -- and that it didn't continue to innovate.
"Sloan's successors became GM caretakers rather than risk takers," Hyde said.
In recent decades, GM management responded too slowly or failed to anticipate major shifts in the market such as the popularity of the minivan in the 1980s and the sport utility vehicle boom in the 1990s.
Looking ahead
GM's outlook is unsettled and eerily similar to that of the turbulent early 1900s, when the company overcame skittish bankers, high-profile management shake-ups and unrelenting competition.
GM's biggest rivals are more likely to come from Asia and Europe now; in its early days there were home-grown Lincolns, Packards, and Hudsons. Since the early 1990s, the company has repeatedly downsized and restructured to reduce waste and better capitalize on its global reach and economies of scale.
It has killed off brands -- Oldsmobile, for one, and launched new ones, such as Saturn, to counter falling market share and competition.
With its U.S. market share hovering just above 20 percent, GM is struggling to support even more brands -- Chevrolet, GMC, Saturn, Pontiac, Buick, Cadillac, Saab and Hummer -- than it did when it commanded more than 50 percent of the market a half-century ago.
Faced with record gasoline prices, a housing slump and growing unemployment, the U.S. marketplace has suddenly turned away from GM's core truck and SUV lineup and seems unwilling to sample its cars despite great improvements in independent quality surveys.
The company is responding with another round of job and spending reductions, benefit cuts, plant closings and the elimination of its dividend for the first time in 88 years.
GM has faced crises before -- a brush with bankruptcy in 1920, and during the Arab oil embargo and gas shortages of the 1970s, when the U.S. market underwent a historic shift away from rear-wheel-drive sedans, a GM staple, to smaller vehicles.
Today, it is staking its future on overseas markets in China, Russia, India and Eastern Europe, while redoubling efforts to win back customers and generate sales growth in the United States. And it is banking on a new generation of clean power sources to set it apart from rivals.
But the times are different and the challenges seem more daunting. GM's stock price no longer commands respect on Wall Street. Its credit rating has been slashed to junk status -- depriving it of the affordable capital it relied on in the past to grow. Toyota Motor Corp. and Honda Motor Co. are considered leaders in developing alternative power sources.
"Leaders and innovators don't keep an advantage for long," Hyde said. "Look at how far GM has fallen."
GM founder Billy Durant discovered and believed that great periods of change also present great opportunities, and GM management is re-examining his famous playbook.
"We intend to be the global leader in a broad range of advanced propulsion technologies, which will be the key to addressing the issue of energy supply, energy security and CO2 emissions," GM Chairman Rick Wagoner recently told the Flint Journal, where Durant created GM. "GM's centennial is an opportunity to rededicate ourselves to leading the industry in meeting these challenges."
The next 100 years will determine if GM is right, and history can be repeated.
The DuPont board of directors has elected 
