History of General Motors

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General Motors (GM) is a multinational corporation with its headquarters situated in Detroit Michigan. The company’s history dates back a couple of decades and entails a broad range of industrial activities worldwide.

General Motors’ history delves in “motorized transportation, engineering and manufacturing” (Barnhoorn, 2012, p. 45). The company was established in 1908 as a holding corporation. By 2012, General Motors had employed over 202,000 people. Today, the company has created employment for over 324,000 people worldwide.

Besides, it has sold over 8.35 million cars globally (Chowdhury, 2014). The company sells its cars under different brands. The current brands include Vauxhall, Cadillac, Buick, and Chevrolet. Apart from selling cars, General Motors also distributes numerous non-automotive brands like Terex and Euclid.

In 1930, General Motors ventured into the aeronautical industry. It purchased Fokker Aircraft Corp, which was an American company. Later, it bought Berliner-Joyce Aircraft. General Motors merged the two companies to establish General Aviation Manufacturing Corporation.

Barnhoorn (2012) alleged, “Through a stock exchange, General Motors took controlling interests in North American Aviation and merged it with its General Aviation division in 1933” (p. 47). In 1948, General Motors pulled out of North American Aviation, and since then, it has never invested in the aircraft industry again.

The company purchased both Electro-Motive Corporation and Winton Engine in 1930, changing their names to General Motors Electro-Motive Division (Barnhoorn, 2012). General Motors embarked on manufacturing diesel-propelled locomotives, which dominated the American railroads.

The locomotives played an important role during World War II. General Motors got rid of the Electro-Motive division in 2005. In 1932, General Motors established an ancillary company dubbed United Cities Motor Transport.

The company helped GM to “transform streetcar systems to buses in small cities” (Chowdhury, 2014, p. 129). Chowdhury (2014) alleged that in 1936, General Motors participated in a conspiracy aimed at eradicating streetcar system.

According to Ready (2004), General Motors played a significant role in World War II. The corporation manufactured enormous quantities of aircrafts, cars, and armaments that the United States used during the war. Nevertheless, the war adversely affected General Motors’ global interests.

The American, British, and Canadian branches were divided with each branch supporting the local government. Ready (2004) alleged that it became hard for the United States government to manage GM-owned companies in Germany.

The German government took control of the companies and used them to manufacture weapons and vehicles. Chowdhury (2014) argued, “General Motors ranked first among the United States corporations in the value of wartime production contracts” (p. 130).

The company’s William Knudsen helped President Roosevelt to manufacture and supply cars and weapons. On the other hand, the company’s subsidiary in Britain contributed to making the Churchill tank. The tanks were helpful in the United Kingdom’s operations in North Africa.

General Motors’ participation in the World War II made it famous across the globe. The post-war period saw the company become the largest automobile enterprise in the United States (Galster, 2012). Additionally, the company’s revenue went high and significantly contributed to the United States’ gross domestic production.

In 1953, Eisenhower appointed General Motors’ president (Charles Wilson) as Secretary of Defense. Charles Wilson declared that he was ready to protect the United States without considering if his decisions could affect General Motors (Galster, 2012).

However, Charles confirmed that he did not envisage a situation where his decisions could affect General Motors. He believed that both the United States and General Motors shared common interests.

Later, his sentiments were misinterpreted with some people arguing that Charles meant that the General Motors’ interests coincided with those of the country. In 1955, General Motors became the first company to remit the highest levies in the United States (Galster, 2012).

In 1958, the branch differences within General Motors started to fade away as the company developed high-performance engines. The company introduced higher trim replicas like Pontiac Bonneville and Chevrolet Impala (Galster, 2012).

The replicas were sold together concurrently other models, making it hard for customers to distinguish them. In 1961, Oldsmobile, Pontiac, and Buick came up with engines that were similar to Pontiac Bonneville and Chevrolet Impala.

Hence, the models eliminated the differences that existed among the General Motors’ divisions across the globe. In 1960s, GM encountered stiff competition from other car companies. Therefore, it was forced to manufacture superior cars to remain competitive (Barnhoorn, 2012).

For example, General Motors built Chevrolet Corvair to counter Volkswagen Beetle. Besides, after Ford Company made Falcon, General Motors responded by making Chevy II. In 1977, General Motors launched Chevrolet Vega to curtail import of cars from foreign companies.

However, Chevrolet Vega’s inventive aluminum engine encountered numerous problems (Barnhoorn, 2012). General Motors stopped manufacturing Chevrolet Vega after realizing that the car was not doing well in the market.

Even though General Motors continued to grow its market share from 1960s to 1980s, it suffered from product disagreement. Barnhoorn (2012) posited, “It seemed that, in every decade, an important mass-production product line was launched with defects of one type or another showing up early in their life cycle” (p. 61).

Therefore, the company always had to make some adjustments to improve its products. However, it was hard to convince customers to purchase the improved products. For instance, General Motors launched Chevrolet Corvair in 1960s. At first, the car was received well (Rattner, 2010).

Later, its unusual handling made customers to consider it unsafe. Later, General Motors improved the car’s suspension system and made a number of improvements to make it safe. However, Chevrolet Corvair’s reputation had been adequately ruined such that customers were not ready to purchase it.

The 1970s was the era of the Vega. It started as a famous car, but the fame did not last for long. General Motors was affected by labor strife in its Ohio’s production plants. Hence, many customers felt that the company could not guarantee the safety of its cars (Rattner, 2010).

In 1977, General Motors stopped manufacturing the Vega model since it was not doing well in the market.

According to Rattner (2010), Oldsmobile’s turnover went up between 1970s and 1980s. It received affirmative reviews from customers. Besides, people had faith in its Rocket V8 engine. Rattner (2010) posited that Olds dislodged Plymouth and Pontiac as the third best selling trademark in the United States.

The first two brands were Chevrolet and Ford. Increased recognition of Oldsmobile’s cars led to a significant challenge in 1977. Oldsmobile could no longer satisfy the market since the demand for V8 engine was higher than production capability.

Hence, it started to equip its car models with Chevrolet 350 engines to meet the demand (Rattner, 2010). The majority of customers did not realize what Oldsmobile had done. However, many customers learnt that they had been short-changed when they took their cars for maintenance.

They filed lawsuits, which crippled the General Motors’ reputation. People published disclaimers alleging that Oldsmobile was using engines manufactured by other General Motors’ divisions to assemble its cars.

The disclaimers adversely affected GM status forcing the corporation to come up with a single unit for making car engines. Today, all its engines are built by GM Powertrain (Rattner, 2010).

The history of General Motors is characterized by ups and downs. The company has encountered one crisis after the other. However, the management has always found ways to salvage the company. In 2010, the administration helped the company to overcome bankruptcy that saw it close the majority of its branches.

The management restructured General Motors’ brand portfolio to help it compete with other established brands (Chowdhury, 2014). The company abolished a number of nameplates like Saturn, Pontiac, Goodwrench, and Hummer. Besides, it removed the culture of embossing its mark of excellence on all its cars.

According to Chowdhury (2014), General Motors has moved from “a corporate-endorsed hybrid brand architecture structure, where GM underpinned every brand to a multiple brands corporate” (p. 133). Indeed, it is hard for one to identify General Motors’ brand in the market.

The majority of its brands do not bear a trademark. Moreover, the United States’ branch has purged the famous blue “badge” from its website. However, the Canadian branch still reveres the blue “badge”. Nowadays, General Motors has two superior brands that control its global development.

They are Chevrolet and Cadillac. The Cadillac brand develops lavish cars that are aggressive and dominant (Chowdhury, 2014). Besides, General Motors is in the process of reviving other brands like Buick, Holden, Opel, Baojun, and Vauxhall to help it reach a wide customer base.

References

Barnhoorn, J. (2012). Recognize sustained competitive advantage: A comparison in the automotive industry out of an investors’ perspective. Delft: Delft University of Technology.

Chowdhury, S. (2014). Strategic roads that diverge or converge: GM and Toyota in the battle for the top. Business Horizons, 57(1), 127-136.

Galster, G. (2012). Driving Detroit: The quest for respect in the motor city. Pennsylvania: University of Pennsylvania Press.

Rattner, S. (2010). Overhaul: An insider’s account of the Obama administration’s emergency rescue of the auto industry. New York: Houghton Mifflin Harcourt.

Ready, D. (2004). The characteristics of great leader-builder companies. Business Strategy Review, 15(3), 36-40.

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History of General Motors

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