Chevrolet's First Steps: In the Beginning

By James W. Burnes
Updated 10/21/2001

Editors Note: A special thanks goes to Mr. Ken Kaufmann for his extensive ongoing research into Chevrolet history and his support and research assistance for the production and continued update of this article.

To understand what the beginning of Chevrolet was about, one must also understand the beginning of General Motors.

Partnering with Josiah Dallas Dort in 1886, William C. Durant, future founder of Chevrolet, purchased the Coldwater Road Cart Company. This company was very successful and at its height, operated fourteen factories. By 1890, Durant-Dort Carriage Company was the nation's largest carriage company, producing approximately 150,000 vehicles a year. At left is a photo of the original facility - today a national historic landmark.

In 1904, Billy Durant was approached by James Whiting of the Buick Motor Company to promote his automobiles and on November 1, 1904 Durant took control. Between 1904 and 1908, Durant was Buick's president and established essential parts and accessory companies such as Weston-Mott and Champion Ignition, located in Flint, Michigan. He built Buick into a highly successful company b yproducing a low, medium, and high price cars to meet the needs of any buyer.

William C. Durant then founded General Motors four years later on September 16, 1908. Incorporating General Motors of New Jersey (GM) in Hudson County, NJ with a capital of $2,000. Within 12 days the company generated stocks that produced $12,000,000 cash. On September 29, 1908, GM bought Buick. Later, GM bought Oldsmobile in Lansing, Michigan (November 12, 1908), Oakland in Pontiac, Michigan(January 20, 1909), and Cadillac in Detroit, Michigan (July 29, 1909 for $5,000,000). By 1910 he had purchased 17 companies. Unfortunately financial trouble was not far off.

The superpower of several motorcar companies was not a new idea for Durant. As early as 1907, he had confided to associates that his goal was to control the entire automobile industry. As a first step toward that end he had tried to put together a conglomerate combining Buick, Ford, Maxwell, and Reo into a single corporation. But Henry Ford wanted cash for his organization, as did Ransom Olds, so the deal fell through.

Late in 1909 bankers turn down William Durant's request for a loan to buy Ford Motor Company for about $9.5 million.

The cause of Durant's downfall at General Motors was his ambitious expansion program. Stretching his credit to the limit he acquired numerous properties, some of them of dubious value. There was, for instance, the Welch, an automobile of superb quality, that was "as big as a freight car," according to one of Durant's associates. But at $7,000 the Welch proved nearly impossible to sell. Other firms acquired by Durant during this period included the Randolph, whose builders had great plans but apparently failed to manufacture even a single car; the Rainier, soon to be replaced by the ill-fated Marquette; the two-cycle Elmore; the friction-drive Carter Car; and a taxicab called the Ewing. All of them were losers.

By mid-July 1910, General Motors was seven million dollars in debt to the First National Bank of Boston, and its credit line was stopped. The creditors viewed Buick as worth saving, but recommended the liquidation of the balance of the operation. At this point Henry Leland, founder of the Cadillac (and, later, founder of Lincoln) interceded. The bankers agreed to supply GM with the needed capital - at exorbitant rates, of course-provided Durant stepped down. Durant didn't completely loose out in the deal, while he lost day-to-day control of General Motors, he remained on their board of directors!

Durant wasn't finished. He was going to gain control of General Motors by creating a new company.

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Copyright 2001-2003 James W. Burnes All Rights Reserved

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