General Motors
The impact of auto manufacturer General Motors on American culture, the economy, and politics is staggering, as is the sheer size of the corporation. For years, GM was the largest corporation on earth, its value greater than most nations. It was the first company to gross more than one billion dollars a year. When GM had a bad year in 1957, commentators said, "GM sneezed and the economy caught a cold," so interdependent were the U.S. GNP and the fortunes of GM. Controlling more than half of the market and creating more cars than its domestic rivals combined, GM made and sold cars everywhere in the world. Although regulation, foreign competition, and oil shocks have rocked GM the past few decades, for most of its history it has towered over not just the auto industry, but all industry. And from the farmer-friendly, half-ton pick-ups of the 1930s, to the luxurious Cadillac Coup De Villes or the space-age looking Buick LeSabre of the 1950s, to the Pontiac GTO for the youth longing for "muscle cars" in the late 1950s, to the "uniquely American" 1957 Chevy, to sports cars like the Pontiac Trans-Am of the 1970s, to the one and only Chevy El Camino half car/half pick-up of the same decade, GM has produced not just cars, but symbols of American culture.
While Henry Ford staked his claim on manufacturing genius, the "father" of General Motors, Billy Durant, brought to the industry "the art of the deal." Durant was not just an entrepreneur, he was an expert dealmaker who merged companies and formed GM as a large holding company. GM started with Olds and Buick in 1908, then added Cadillac a year later. Durant, however, expanded too quickly and was forced out by bankers. Undeterred, Durant hired a racecar driver named Louis Chevrolet to design a new car, and in 1915, Durant merged the two companies and regained control. Durant continued to buy not only auto companies, but also suppliers (Fisher Body) and related companies (Frigidaire, which was sold in 1979). Yet, again, Durant overextended and was forced out in 1920, his place soon taken by Alfred Sloan.
If Ford created modern manufacturing techniques (Fordism) to conquer the massive scale of making automobiles, then Sloan created management techniques (Sloanism) to master the managing of a large-scale firm. Sloan's management ideas on hierarchical line authority became the model for all large corporations for years. Sloan also became the first GM president to engage in collective bargaining when the United Auto Workers staged a series of successful sit-down strikes in GM plants in Flint, Michigan, in 1937. But Sloan's greatest triumph was his creation of a styling and color department under the direction of designer Harley Earl in 1927. From this concentration on styling, thus on marketing, GM cemented in the American psyche the fact that, according to David Halberstam, "the car was not merely transportation, but a reflection of status, a concept to which most Americans responded enthusiastically as they strove to move up into the middle class, and then the upper middle class." With the annual model changes—which were often only cosmetically different from the previous year—new car buyers were hooked. It was Sloan and Durant's vision of a car for every market niche: new car buyers could start cheap with a Chevy and then, as they earned more, work their way up to an Olds, and everyone would dream of owning a Cadillac.
The war years made GM rich, but its wealth became unprecedented in the 1950s with a combination of pent-up demand, the need for a car for suburban living, and the coming of the interstate highway system. In addition to lobbying for the automobile as the mode of transportation for Americans, GM also did its best to destroy the competition. In 1949, GM, Standard Oil, Firestone, and other companies were convicted of criminal conspiracy to replace electric transit lines with gasoline or diesel buses. GM had replaced more than one hundred electric transit systems in forty-five cities with GM buses. Despite a fine and the court ruling, GM would, with the aid of urban planners like Robert Moses, block efforts at mass transit.
With Earl's love of the "jet engine look" GM cars came to resemble planes, loaded with chrome and fins. Advances in engineering could have made cars more fuel efficient; instead, GM opted to make cars more powerful and loaded with expensive options like air-conditioning. GM showed off its cars with road shows called Motoramas, which annually drew more than one million spectators. The Motoramas ended in 1961 as GM concentrated its advertising dollars on television. During the 1960s, GM divisions sponsored hundreds of TV shows. With famous ads like "See the USA in the Chevrolet," GM created a national car culture, made even more attractive with the coming of color television.
Yet, the events of the 1960s also brought about the first chinks in GM's armor. A poorly designed knock-off called the Corvair inspired a young lawyer named Ralph Nader to write a book about auto safety (or the lack thereof) called Unsafe at Any Speed. While the book was troubling to GM, more embarrassing was GM's clumsy attempt to investigate and intimidate Nader. This led to the spectacle of GM issuing Nader a public apology. The safety issues led to more government regulation of the auto industry, which escalated with emissions and other standards enacted in the 1960s and 1970s. Like all large institutions, GM found itself under attack in the 1960s, but nothing compared to the shocks it would face in the next decades.
Beginning with a lengthy UAW strike in 1970, through oil embargoes, inflation, and recessions, GM lost profit, market share, respect, and dominance into the 1990s. The company underwent a series of huge reorganizations coupled with a titanic downsizing of its work force. The devastating effect of GM's layoffs is best chronicled in Michael Moore's bitterly funny 1989 film Roger & Me. After a series of management shake-ups, some at the behest of new board member Ross Perot (whose Electronic Data Systems Corporation had been purchased by GM in the 1980s), GM tried to reinvent itself with the Saturn project in 1984. Saturn was an attempt to develop not just a new car, but a new method of manufacturing and selling automobiles based on the Japanese model. While new, Saturn also represented something old in GM's past: producing the right car for the right market.
Further Reading:
Automobile Quarterly Magazine editors. General Motors, the First 75 Years of Transportation Products. Princeton, Automobile Quarterly Incorporated, 1990.
Cray, Ed. General Motors and Its Times. New York, McCraw-Hill, 1975.
Flink, James J. The Automobile Age. Cambridge, MIT Press, 1988.
——. The Car Culture. Cambridge, MIT Press, 1975.
Halberstam, David. The Fifties. New York, Villard Books, 1993.
Keller, Maryann A. Rude Awakening: The Rise, Fall, and Struggle for Recovery of General Motors. New York, Morrow, 1989.
Maynard, Micheline. Collision Course: Inside the Battle for General Motors. New York, Birch Lane Press, 1995.
Nader, Ralph. Unsafe at Any Speed. New York, Grossman, 1965.
Sloan, Alfred P. My Years with General Motors. New York, Doubleday & Company, 1996.
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