THE OVERLOOK
By Tom Clavin
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Some anniversaries are more obscure than others but that does not mean they do not have good stories behind them. Case in point: This Friday, September 16, is the 114th anniversary of the creation of General Motors, which offers an opportunity to tell the rise-and-fall-and-rise-and-fall story of William Durant.
He was born in Boston in December 1861. His family was well off and a grandfather, Henry Crapo, was the governor of Michigan. No doubt the family was not pleased when young Durant dropped out of high school to become a cigar salesman. However, he was good at it.
In Michigan, when he was 25, Durant teamed up with Josiah Dort to establish the Flint Road Cart Company. By 1900, it was the leading manufacturer of horse-drawn vehicles in the U.S. Durant was not fond of automobiles, believing that the bad smell of burnt fuel, along with the engines' loud sounds, made them inherently dangerous to the point where he would not let his daughter ride in one. Public outcry over weak government regulation of gasoline-powered horseless carriages was significant, and rather than relying on government regulations to improve their safety, Durant saw it as an opportunity to create a company which could improve the safety of this new class of transportation. To begin this endeavor, Durant first set out to purchase a stake in Buick, then a local car company with few sales and large debts.
By now, from his holdings in what had become the Durant-Dort Carriage Company, he was a millionaire. In 1904, he assumed full control of the troubled Buick Motors and used his financial and manufacturing resources to correct the company's course. With Durant pushing and marketing the Buick name, the company was able to become the best-selling automobile in America, outperforming earlier leaders Ford, Cadillac, and Oldsmobile -- all of this by the time of the 1905 New York Automobile Show. With Buick as the base, Durant envisioned the creation of a large automobile company, which would manufacture several independent makes and control subsidiary component-making companies. On September 16, 1908, Durant and R.S. McLaughlin of Canada founded General Motors Holding Company.
Two months later, Durant went on a buying spree, beginning with Oldsmobile. He consolidated 13 car companies and 10 parts-and-accessories manufacturers under the new holding company's control. The following year, General Motors bought Cadillac and Pontiac along with many parts-manufacturing companies, paint and varnish companies, and other accessory manufacturers. But by 1910, the rapid-fire acquisitions Durant had made caught up with the business, which caused the corporation to have become grossly overextended. When the cash shortage became acute, Durant was forced out of General Motors.
Undaunted, Durant partnered with Louis Chevrolet to begin a new line of cars. The company was hugely successful, so much so that in 1916, Durant was able to leverage Chevrolet's sales to regain control of General Motors. He went on to lead GM until 1920 . . . and along the way, he also founded the Frigidaire appliance company.
Following the U.S. entry into World War I in 1917, Durant, who detested war, declared that GM would not participate in defense work. He ran afoul of Cadillac founder Henry Leland, who was an ardent patriot and was eager to assist in the U.S. war effort. Leland left GM and founded the Lincoln Motor Company, which received contracts to build Liberty aircraft engines.
In the 1920s, Durant became a major player on Wall Street. What happened next became a sadly familiar story: On “Black Tuesday” in October 1929, Durant joined with members of the Rockefeller family and other financial giants to buy large quantities of stocks, against the advice of friends, to demonstrate to the public their confidence in the stock market. His effort proved costly and failed to stop the market slide. By 1936, Durant was bankrupt.
He and his wife lived on a pension provided by his old pal McLaughlin. He was able to cobble enough cash together to open a bowling alley/fast food restaurant back in Flint, working the kitchen himself. Durant predicted that family-friendly entertainment venues would be big business in the coming years and he hoped to expand to a chain of 30 bowling alleys. In 1942, Durant traveled to Nevada to open up a cinnabar mine, hoping the U.S. government would subsidize it through defense contracts, although this ultimately proved a pipe dream. The 80-year-old Durant made an exhausting climb on foot to the mine entrance to inspect it, and after returning to Flint a few days later, he suffered a stroke that left him partially paralyzed. He was forced to move with his wife to an apartment in New York City.
At the end of World War II, Durant predicted an economic boom and that the possibilities for consumer goods were almost limitless. The final moneymaking scheme he backed was a hair tonic venture. Although Durant's mental faculties were unimpaired to the end and he attempted to work on his memoirs, complications from the stroke gradually robbed him of his ability to speak coherently. He attempted to travel back to Flint in 1946, but his health had deteriorated to the point where this was impossible.
The William Durant died in March 1947 at age 85. By the time of his death, the Durants were bankrupt and had been forced to sell off most of their collection of paintings and other valuables to pay for his medical expenses. Still, enough money was raised to inter Durant in a private mausoleum in the Woodlawn Cemetery in the Bronx. His neighbors there include such other business visionaries as Jay Gould, Rowland Macy, Joseph Pulitzer, and F.W. Woolworth.
Tom Clavin is the bestselling author/co-author of 18 books, including his latest collaboration with Bob Drury, Blood and Treasure: Daniel Boone and the Fight for America’s First Frontier. The trade paperback edition of Lightning Down: A World War II Story of Survival will be published next Tuesday. Please go to your local bookstore or to Bookshop.org, Amazon.com, BN.com, or tomclavin.com to purchase a copy.
From cigar salesman to multi-millionaire. Quite a tale. And how ironic that he now lies with his fellow, and former, titans of business. Clavin does it again with a unique and forgotten personality brought back to life for our enjoyment and edification.
I guess retail really IS dead!