Who Started General Motors?
Two men can be credited for starting General Motors in Detroit, Michigan. Billy Durant's entrepreneurship and corporate savvy created the company and Alfred P. Sloan's business management saved it from collapse in its infancy. Durant formed General Motors in 1908 and quickly acquired car companies to operate under the GM umbrella. Sloan's business model during a severe recession in 1920 and 1921 saved GM from bankruptcy.
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Building a Company
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By 1910, Durant had collected Buick, Ewing, Elmore, the Rapid and Reliance trucks, Oldsmobile, Cadillac, Buick, Sheridan and Oldsmobile as separate car divisions under GM.
Thrown Out
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Just two years after GM's founding, Durant overextended himself in his buying spree--bank lenders took control of the company and forced Durant out.
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Back In
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Durant assumed financial control of Chevrolet, which allowed him leverage to acquire enough GM stock to regain a controlling interest.
United Motors
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While developing Chevrolet, Durant formed United Motors, which acquired car suppliers and motor companies, including Hyatt Roller Bearing, which employed Alfred Sloan.
Final Curtain
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Further speculative buying and corporate manipulations led to Durant's final ouster from GM. Sloan was named GM president in 1923 and United Motors was absorbed into GM.
New Business Model
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As GM president, Sloan established a pricing structure for each car model and developed a decentralized system under "coordinated control" to allow management flexibility. It continues to serve as the business model for companies today.
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