Automotive News - September 15, 2008 - (Page 20)

General Motors Story 2 /100 Charming Billy builds an empire, then sees it slip away — twice Charles Child n the early 1880s, high school dropout Billy Durant traveled by train from Flint to Port Huron, Mich., to sell cigars. Sales of a few hundred would have made it a good trip. In a few days of selling, Durant won over most of Port Huron’s cigar retailers. He staggered his boss when he returned with orders for 22,000 cigars. Durant’s powers of persuasion blossomed early — and never left him. In the coming decades he would commit a full list of business blunders. But he never failed to charm as he daringly stitched together General Motors in 1908, lost control, returned — and lost it one more time. Broke, in his late 70s and working in a Flint bowling alley, Durant still had big business plans. He wanted to build 50 bowling centers in the United States, according to Billy Durant: Creator of General Motors, a biography by Lawrence R. Gustin. “I haven’t a dollar,” he told a visitor to his bowling alley. “But I’m happy, and I’m carrying on because I can’t stop. There’s much more to life than money.” © GM Corp. I First came carriages Durant’s grandfather, Henry Crapo (pronounced CRAY’-po), was one of the founders of Michigan’s prosperous 19th century lumber industry and served two terms as the state’s governor during and after the Civil War. Crapo’s daughter, Rebecca, married William Clark Durant, scion of a prominent New England family. William Clark Durant was a banker. He lost everything he had speculating in the stock market and then turned to drink. Willie — his boyhood nickname; Billy came later — was born in 1862. He was doted on by his grandfather, who died when the boy was 7. Soon after that his parents divorced, and Willie and his mother moved to Michigan to be near her family. His fascination with autos started in Flint, which was a center of lumbering and carriage manufacturing after the Civil War. “Both the values of the grandfather and the demons of the father would characterize Billy’s often contradictory optimism and restlessness through his life,” wrote William Pelfrey in Billy, Alfred, and General Motors. One day in 1886, Durant, in his early 20s, took a ride in a horse-pulled carriage with an innovative suspension. The ride was surprisingly smooth. Durant immediately saw its potential and that day booked a train to the carriage’s manufacturer across Michigan in a town called Coldwater. He bought the two-man company for $1,500 on the spot and shipped its tools, jigs and inventory back to Flint. By 1900, Durant and his partners in Flint had built one of the country’s major carriage manufacturers. Durant was a millionaire at age 40 — but he was only getting started. Durant was skeptical when autos first appeared in Flint. They were noisy, and they scared horses. But then he took a Buick for a ride. Buick, which was based in Flint, was highly regarded for its strong two-cylinder motor. But the company was struggling financially. Durant was impressed with the car. Best of all, says Gustin in Billy Durant, the car drew a crowd. That sealed the deal for Durant’s entrepreneurial instincts. Durant and his group bought Buick in 1904. Billy’s silver tongue and his reputation for 20 September 15, 2008 Billy Durant — in the light-colored cap in the front seat — shows off a new Buick model during a promotional tour in 1906. “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.” — Billy Durant making money were essential. Durant wrote in his memoirs: “In 48 hours I raised $500,000. Few of the subscribers had ever ridden in an automobile.” In 1908, Durant founded General Motors and added Oldsmobile, a promising but struggling automaker in Lansing, Mich. Oakland Motor Car Co., which became Pontiac, and Cadillac were added in 1909, along with a long list of suppliers and related companies. “ ‘No, 1:30 a.m.,’ Durant answered. ‘We’ll get this in yet today.’ “ The roller coaster 1908: Durant established GM with Buick, Oldsmobile. 1909: GM acquired Oakland (later Pontiac) and Cadillac. 1910: Bankers forced Durant out during recession. 1911: Durant incorporated Chevrolet with racer Louis Chevrolet. 1916: With financial help from Pierre DuPont, Durant reacquired control of GM. 1920: Durant was forced out of GM for good. Bank trouble Trouble began in 1910. Bankers grew leery of the auto industry, which was generating enormous debt. Durant, struggling with huge loans and modest profits, ran out of cash and was forced to cut production to a trickle. He sought more loans and got them — but at a price: Bankers set up a management board and forced Durant out in September 1910. Durant was crushed but immediately began plotting a comeback. His backers in Flint stuck with him, and Durant hooked up with race driver and mechanic Louis Chevrolet and began building Chevrolets. In 1915, Chevrolet sold 20,158 cars, and Durant had enough credibility to try to regain control of GM. Joined by Pierre DuPont, his group started buying GM stock. They succeeded in 1916, and Durant was back in charge. Working through the night According to Gustin’s biography, Durant’s energy during that acquisition period was mind-boggling. “He worked late into the night, and people waiting to see him were amazed when he made appointments with them at midnight, or 1 a.m., or even later,” Gustin wrote. “ ‘One-thirty a.m. Don’t you mean p.m.?’ one man asked. He didn’t last long. Durant was superb at scheming and acquiring but hopeless as the manager of a major corporation. He fussed over insignificant details. He insisted on oneman control. He preferred his own intuition to the brilliant recommendations of two of his up-and-coming executives, Alfred Sloan and Walter Chrysler. Eventually he was sunk when he personally borrowed millions to buy shares of GM stock during the recession of 1920. He couldn’t repay the loans. DuPont stepped in and forced him to resign. He later dabbled more in the auto business and on Wall Street. But his day had passed. By 1940, he was working at the Flint bowling alley, where he was visited by a reporter for The Flint Journal. Durant was still Durant. “I remember that he never sat down,” recalls the reporter in Gustin’s book. “He would be running here and there, waiting on customers, talking rapidly all the time.” AUTOMOTIVE NEWS

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