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Between like a rock and like a hard place

It is a day of ignoble endings and inglorious beginnings: General Motors, once the world’s largest car company, has filed for Chapter 11 bankruptcy. A few words on how  GM came into being more than a century ago.

Durant tried to buy Ford in 1907, but the bid failed when Henry Ford (1863-1947) insisted on being paid in cash. The next year Durant formed General Motors Company in response. Durant’s concept for his new company was to be a total supplier of automobiles from the car itself to its parts and service. Durant added Cadillac, Oldsmobile, Oakland (Pontiac) and other lesser companies to the original Buick at General Motors. Durant was a great salesman, but not so great at purchasing companies. Many of his acquisitions were over-priced or ill-advised. In 1910 General Motors was heavily in debt and under a cash crunch. Bankers rescued the company from its financial predicament, but the price was a loss of control for Durant.

We’ll leave the rest to the Propellerheads.

Source: “William Crapo Durant.” Gale Encyclopedia of U.S. Economic History. Gale Group, 1999.

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Posted on: June 1, 2009, 4:38 pm Category: Factoids Tagged with: , , ,

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