Considered the world’s largest industry, not only in the automotive sector, General Motors emerged in 1908 thanks to the initiative, financial sense and courage of William C. Durant. The first negotiations to form the General Motors Company took place in May of that year, when Benjamin Briscoe, of Maxwell-Briscoe Motor ComPany, informed Durant that Georges Perkins, one of Maxwell-Briscoe’s main shareholders, was trying to promote the merger of the largest U.S. automobile factories in order to avoid bankruptcy due to competition among them.
Therefore, the first nucleus of General Motors was developed around already famous names and Durant soon acquired the Ford Motor Company as well. On October 26, 1909, the Board of Directors of General Motors had approved the acquisition of Ford for $8 million, an amount that also included the purchase of the Ford name. Durant began negotiations with the National City Bank of New York to obtain the necessary money, but it was denied. The rapid and convulsive development of the North American automobile industry was observed with distrust in high finance environments. There was too much speculation. By the end of 1910, General Motors, in a rapid upward march, had grouped 30 different companies and had interests in numerous mid-sized companies. All in all, a magnificent business had been done, since, in the first years of activity, General Motors made net profits of more than 19 million dollars (mostly thanks to Buick), of which it reinvested more than 18 million in a vast expansion programme.
But the crisis of 1909 was already beginning to produce its effects and the automobile industry was the first to suffer its consequences. Suddenly, the banks began to deny their money and to reject requests for credit, especially if they were large. Until the first months of 1910 General Motors’ sales had been normal and satisfactory (almost doubling those of 1909), but during the summer it was already in full crisis.
The exceptional industrial power of General Motors was particularly evident during the Second World War, when it was estimated that, from 1940 to 1945, it supplied the U.S. Government with military equipment valued at $12 billion, producing a quarter of all aircraft engines, battle tanks and armoured vehicles manufactured in the country. Under the chairmanship of Harlow H. Curtice, the company’s sales exceeded $10 billion in one year for the first time. In 1955, General Motors made a profit of $1 billion.