Friday, 26 Apr 2024

Opinion | The General Motors Century

A century ago this fall, a black two-door Oldsmobile coupe rolled off a General Motors assembly line. It was the company’s one millionth car. Today we take General Motors’s size for granted — we understand, immediately, that this week’s strike by the company’s workers will reverberate across the country. But it wasn’t always so, and the rapid rise of General Motors through the 1910s not only reshaped the Midwest but also reflected tremendous changes in the American economy and society.

Scarcely 10 years old in 1919, General Motors was initially just a holding company. It was established by William C. Durant, who ran a carriage business in Flint, Mich., as a hodgepodge consolidation of young automakers, including Buick, Cadillac, Oakland and Reliance Motor Trucks. Mr. Durant, who proved a better entrepreneur than manager, was ousted two years later.

In 1919, the first full year of postwar production, GM experienced a 57 percent net gain in sales and doubled its work force. “It is impossible to get men enough to supply the demand in Detroit,” wrote The New York Times in April of that year. It noted that “all classes of workers” were wanted at Chevrolet — now part of GM, thanks to Mr. Durant, who had founded it with a Swiss racecar driver and used it to get his old job back (only to be ejected once again a few years later).

General Motors was more than just a car company. It built thousands of homes for workers and their families — entire neighborhoods, including Flint’s Civic Park, which celebrates its centennial this year. In June 1919, GM broke ground on an imposing world headquarters in Detroit with 15 stories and 30 acres of floor space, making it one of the largest office buildings on earth. Alongside 3,500 offices, there were 19 bowling alleys and two swimming pools.

But perhaps GM’s biggest move came on Sept. 25, 1919, when it bought a 60 percent stake in the Fisher Body Company, the largest and best maker of auto bodies. It also signed a contract to purchase nearly all that Fisher produced at cost, plus 17.6 percent. This unleashed cash for Fisher to invest in wood-and-metal auto bodies tailored for GM and develop more plants. By the end of the year, GM became only the second company in America to be capitalized at $1 billion.

By the end of 1919, General Motors became only the second company in America to be capitalized at $1 billion.

Alfred P. Sloan Jr., a slim and serious man, took over General Motors as president in 1923 and dominated the company for the next 30 years. Mr. Sloan saw his immediate task clearly: a battle with Ford, the other great automaker at the time, for the “low-price, high-volume” automobile market. The Fisher deal made it possible for GM to compete with closed-body vehicles, which were, as he put it, “by far the largest single leap forward in the history of the automobile since the basic car had been made mechanically available.”

Mr. Sloan understood the future. Closed-body cars made a new driving experience possible, quite different from the open-air thrill that Henry Ford pioneered. With a hard roof, year-round travel was possible. Drivers could go on longer journeys (especially as roads improved). Closed-body cars also offered more anonymity, a potential boon for the small but rising number of African-American drivers. Suddenly, everyone wanted to be on the road.

But closed-body cars sold at high prices. After inking the deal with Fisher, GM was able to work its way toward selling closed two-door Chevrolets at prices that were within striking distance of Ford’s Model T. “The rise of the closed body made it impossible for Mr. Ford to maintain his leading position in the low price field, for he had frozen his policy in the Model T, and the Model T was pre-eminently an open car design,” Mr. Sloan wrote. “The old master had failed to master change,” he added. “Don’t ask me why.”

The company did more than just sell cars; it revolutionized consumer behavior. In 1919, it created the General Motors Acceptance Corporation so that customers could buy cars on credit. This vastly expanded the market for mass production, and beyond the auto industry, it transformed the way that expensive items are bought and sold. It also used planned obsolescence: Vehicles debuted as new annual models. GM thrived by betting on the diversity of consumer preference. It was the first to offer cars in colors other than black and invested heavily in design. Its cars have become ingrained in American culture, from the 1957 Chevrolet Bel Air to the 1977 Pontiac Trans Am. Car buffs exult at the tail fins of an Eldorado or the split windows of a Corvette Stingray as if they were sculpted by Michelangelo.

Although GM profits certainly enriched stockholders, they also fueled the rise of the middle class. That included the company’s huge labor pool, particularly after a sit-down strike in 1936-37 won the United Auto Workers the right to bargain collectively. Later, GM pioneered an employee benefit plan, akin to a 401(k), to entice the workers that it desperately needed. That, plus no-interest loans on the homes the company built, spurred a migration of new workers from around the world. America would never be the same.

General Motors and its army of workers transformed scores of American cities, including Detroit and Flint; Janesville, Wisc.; Lordstown, Ohio; Trenton, N.J.; Indianapolis; and many other places that were built around their GM and Fisher plants — physically, politically and culturally. Like a photo negative, recent plant closures and cuts reveal how urban history is interlaced with General Motors history. Even in cities like Flint, where it has been in retreat for decades, GM’s shadow still looms: Mammoth vacant lots where auto plants once stood have required decades of work to repurpose, thanks in part to extensive soil contamination. At the same time, the patronage of yesteryear is visible in institutions like the Flint Institute of Arts, the Flint Symphony and Kettering University, the cooperative college formerly known as the General Motors Institute, founded in 1919.

But if GM was ahead of its time in some ways, it reflected it in others, especially around race. Its neighborhoods for working families were for whites only. Home prices kept out African-Americans, who were relegated to GM’s lowest-paying jobs. Insultingly, the same deed restrictions that prohibited livestock, liquor sales and outhouses in these sparkling new subdivisions also stipulated that they could not be occupied by anyone who was not “wholly of the white or Caucasian race.” In an ad from the 1920s, the exclusive realtor of GM homes assured buyers that “no shacks, huts, or foreign communities will be allowed.”

GM was far from alone in pushing a lily-white vision of the country’s future. And in putting its muscle behind segregation, it helped create patterns of inequality that remain with us today. This was exacerbated by the highways built through black neighborhoods to subsidize the new motoring class of suburban drivers. Disinvestment has consequences. It is not a coincidence that safe, affordable drinking water has been difficult to get in Flint, still recovering from a water crisis, or in Detroit, plagued by shut-offs.

In putting its muscle behind segregation, GM helped create patterns of inequality that remain with us today.

Other ironies abound in the General Motors story. In the middle decades of the twentieth century, labor relations were generally functional. But the automaker’s anti-union practices led it to decentralize production, which contributed to white flight, suburban sprawl and outsourcing to other countries. The emergence of automation and foreign competitors also took a toll, causing GM to contract in the communities that had placed their fate in its hands — and that was so even before 2009, when the company filed for Chapter 11 bankruptcy. With the help of federal loans, repaid ahead of schedule, GM returned to profitability a couple of years later. Those profits reached $8.1 billion last year, making idled plants another point of contention in this year’s contract dispute.

Then there’s the company’s fraught history with clean air policies. At one point, GM used illegal devices to avoid pollution regulations. It championed leaded fuel, even when workers who handled it were dying or going insane, most notoriously in the New Jersey plant nicknamed the “House of the Butterflies” for the hallucinations they experienced. Along with other companies, GM contributed to decades of misinformation about lead and public health.

Of course, none of these futures was perfectly understood as Americans raced headlong into the automotive future that GM did so much to design. By 1926, the company had built its five millionth car, a Pontiac. Closed-body cars were becoming not just an option but the norm — 73 percent of the market that year.

Ford did eventually release a version of the Model T with a closed body, but there were other reasons that it was losing its edge. People whose top priority was affordability could now get used cars rather than new Model Ts. As Mr. Sloan foresaw, this meant that those who bought new were interested not just in basic transportation but also in comfort, convenience and style. Plus, customers could now cut costs with a trade-in and pay on an installment plan through GM’s financing system. Why not get an upgrade?

Affordable Chevrolets soon overtook the Model T on the low end of the market. Within a decade of the 1919 expansion, GM was the nation’s largest single employer and well on its way toward a record 77 years as the worldwide leader in auto sales.

It is a challenge to compile a detailed balance sheet for all of the ways General Motors helped and hurt the nation that it did so much to define. But it is clear that in 1919, as that millionth car rolled off the line, a great change was beginning. Americans raced toward new frontiers, powered by a seemingly limitless number of automobiles. In the earliest days, cars were for risk-takers, tinkerers, oddballs and the rich. But by 1919, “car culture” became, simply, “culture.”

Perhaps the clearest lesson from this conflicted history is about the power of choices. The details are important, which today’s management and labor understand as they hammer out a plan for salaries, benefits and where cars will be made. But larger choices are also before us. What if we let go of planned obsolescence and debt — or even the idea that car ownership is synonymous with citizenship? What if we re-engineered our cities for all kinds of mobility, not just cars but also bikes, pedestrians, buses and trains? Do we even need to drive at all?

General Motors, now 111 years old, uses this tagline to describe the future: “Zero crashes, zero emissions, and zero congestion.” Mary Barra, its chief executive officer, has put the company on track to sell a million electric cars in the next few years. GM is even advocating for tougher national policies for itself and its peers, and building e-bikes. Once again, it seems we’re at a turning point. Anything is possible.



Further reading: Sidney Fine, “Sit-Down: The General Motors Strike of 1936-1937”; Amy Goldstein, “Janesville: An American Story”; Ben Hamper, “Rivethead: Tales From the Assembly Line”; Andrew Highsmith, “Demolition Means Progress: Flint, Michigan, and the Fate of the American Metropolis”; Jane Jacobs, “The Death and Life of American Cities”; Gerald Markowitz and David Rosner, “Deceit and Denial: The Deadly Politics of Industrial Pollution”; Rhonda Sanders, “Bronze Pillars: An Oral History of African Americans in Flint”; Thomas J. Sugrue, “The Origins of the Urban Crisis”; Gordon Young, “Teardown: Memoir of a Vanishing City.”

Anna Clark is the author of “The Poisoned City: Flint’s Water and the American Urban Tragedy."

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