News From the Auto Industry

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.

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.

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.

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.