“I haven’t a dollar but I’m happy and I’m carrying on because I can’t stop. There’s much more to life than money.” – William Durant
The Rise of Durant
William Durant dropped out of school at age 17. Ignoring his family’s expectations for him to become a lawyer, Durant’s first job was piling lumber, and his second job was selling cigars. He alone sold more than three other sales people combined.
By age 24, Durant was already a successful businessman in the old lumber town of Flint, Michigan.
Durant, who went on to become a partner in a thriving insurance agency, decided to get into the vehicle business in 1886. He bought a small horse cart company with borrowed money. All he got was two completed carts and a design patent. Durant immediately took one cart to a fair and won a blue ribbon. He came home with orders for more than 600 carts even though he had yet to build one.
Within 15 years, the Durant-Dort Carriage Company had grown from a $2,000 investment into a $2 million business. It had become the largest vehicle manufacturer in the U.S., with Factory One its first plant in Flint. William Durant was heralded as the “King of Carriage Makers.”
Betting Big on the Automobile
Durant was a millionaire at age 40, and he was eager for new adventures. With the Durant-Dort Carriage Company running smoothly, Durant was becoming bored. He liked to create organizations.
By 1900, different brands of horseless carriages were being marketed in the U.S. To maintain the title of “Vehicle City,” the city of Flint needed the automobile business. James Whiting of Flint Wagon Works bought Buick to help the city and save the company from financial ruin. Yet, he needed a sharp young businessman to take command, and Durant was the one.
Durant wasn’t interested at first. He said that automobiles were noisy, dangerous contraptions that frightened people and horses. Still, he was willing to give it a shot. He took the Buick out alone, driving it on all kinds of roads for a month or two. He was so impressed that he took over the management of Buick in 1904.
In 1908, Buick production surpassed Ford and Cadillac combined. Durant had made the transition from the largest carriage maker to the largest automobile manufacturer in a little more than three years. Durant became an inspiration to the workers of Flint.
The Birth of GM
A Company with Multiple Brands That Almost Included Ford
One night in 1907, Durant received a phone call about a large automobile merger put together by financier J.P. Morgan. Weeks later, Durant held a meeting in his room at the original Pontchartrain Hotel, together with three other automotive leaders. They were Henry Ford, Ransom Olds of REO, and Ben Briscoe of Maxwell-Briscoe. When Ford announced that he wanted money, not stock, the talks fell apart. Everyone left the sinking ship except Durant, because he knew there must be consolidation.
Durant had a plan B. He knew Oldsmobile was having a difficult time. He took a night train to Lansing, Michigan, roused the Olds officials from bed, and proposed creating a holding company called General Motors that would include Buick and Oldsmobile. They agreed, and General Motors was incorporated on September 16, 1908.
In fact, Durant almost purchased Ford in 1909. After getting GM in shape, Durant had Henry Ford agree to sell the company for $8 million. The loan committee of the bank, however, passed on this deal. If Durant had had the cash, Ford would have become a division of GM.
Major Acquisitions for GM
By the start of 1909, Durant was ready to move in a big way. His aim was nothing less than to gain control of some of the biggest and best automobile companies in America. But he also wanted to get in on the ground floor with companies that were just starting. He wondered what their patents, products and inventions might bring.
Wrote Durant, “I figured if I could acquire a few more companies like Buick, I would have control of the greatest industry in this country. A great opportunity, no time to lose, I must get busy.”
Less than 16 months after GM’s incorporation, Durant had purchased 22 companies of all kinds. Although many were proven worthless due to a few severe liabilities, some were solid gold – Buick, Cadillac, Oakland (Pontiac), Oldsmobile, McLaughlin (GM Canada) and GMC.
While U.S. banking interests looked on cars as little more than a national fad, Durant was already seeing the automotive business as the greatest industry in the land. When Durant predicted that someday 500,000 automobiles would be built and sold in a single year, the bankers thought he was mad. Durant did not care what they thought. He knew he was right.
Down But Not Out
Ousted from GM and Back
In 1910, big problems arose. The market for large cars dried up. People were flocking to Henry Ford’s reliable and inexpensive Model T, his only model. GM, meanwhile, offered 21 different models of larger cars produced by 10 independent divisions, few of which were profitable. Durant’s image went from genius to foolish speculator. To borrow money to keep GM afloat, Durant had no choice but to accept bankers taking control of his “baby” for the five-year term of the loan, starting from September 26, 1910. But Durant was far from through. He was already starting to talk with Buick’s former racing star – Louis Chevrolet.
Chevrolet was a fearless racer and pioneering engineer who beat racing legend Barney Oldfield in his first race. His racing prowess caught the eye of Durant, and he signed up to drive for the Buick racing team in 1909. In two racing seasons, the Buick team won half of America’s road races.
Always wanting to design and build his own car, Chevrolet recalled: “Durant told me, ‘We’re going to need a car.’ So I built it.” Together they founded Chevrolet Motor Company in 1911, named after Louis Chevrolet. It launched two models in 1914 with the first valve-in-head engine, which drew many potential Ford Model T buyers. Chevrolets sold very well.
Durant had kept his shares of GM stock and continued to purchase more. Finally, at a GM board meeting in 1916, Durant announced that Chevrolet now had controlling interest of GM. Durant was again elected president of GM.
Last Empire and New Ventures
Durant Motors and More
From Durant’s return to control through the end of 1919, GM had grown into a vast enterprise. One of GM’s directors wrote, “The General Motors Corporation of today is 8 times as large as the company which the bankers were managing. This is indeed a fine tribute to your foresight.”
In 1920, the post-World War I boom ended, stocks lost 25% of their value, and 100,000 businesses went bankrupt. Durant began secretly buying stock on margin. He felt personally responsible for the thousands of stockholders who had entrusted him with the fate of their funds. Six months later, his $90 million was all gone. He was bailed out again but with a provision that he resign completely from GM. For the second time, he had lost control of the company he had founded. Durant was 59 years old and unemployed.
He wasted no time. Within six weeks of leaving GM without any money, he was back in the automotive business with a new company – Durant Motors. But the Great Depression in 1929 got in his way, and Durant Motors was liquidated in 1933. Yet, Durant, as a visionary, never lost his energy. He earned himself the nickname “Bull of the Bulls” on Wall Street and opened a bowling alley in one of the country’s first drive-in restaurants at the age of 78.