GM's Role In American Life
MELISSA BLOCK, host:
As GM teeters on the brink of bankruptcy, a moment now to talk about the company's rise and decline over its hundred years of car-making.
Mr. RICK WAGONER (Former CEO, General Motors): We are more than a hundred-year-old company. We're a company that's ready to lead for a hundred years to come.
BLOCK: That's then-GM chairman Rick Wagoner at a celebration last year marking the hundred years since William Billy Durant founded General Motors.
And Jamie Kitman of Automobile magazine joins us to talk about the century that followed.
Welcome to the program.
Mr. JAMIE KITMAN (Automobile Magazine): Hi.
BLOCK: Jamie, what was Billy Durant's vision starting out when he put GM together in 1908?
Mr. KITMAN: Billy Durant was a speculator, and what he wanted to do was build an automobile trust. And he put together a lot of existing companies, starting with Buick and Cadillac, and added literally dozens of brands before those were weeded out to what we know today as General Motors.
BLOCK: Well, Ford was first in 1903. GM starts in 1908. But pretty soon, by the end of the 1920s, GM has overtaken Ford as the biggest car-maker in the country. And at one point the idea becomes a model for every income. Why was that so revolutionary at the time?
Mr. KITMAN: Henry Ford, a lot of his notions would today be viewed as insanity by people in the business of selling cars. I mean he really had one model, he thought it was good enough. For many years it was truly only available in black, and he kept lowering the price. There was a need identified by one of Durant's lieutenants, who went on to run the company, Alfred P. Sloan, for cars that had more character and personality. And the elements of speed and style were introduced to cars, whereas those had sort of been secondary concerns. It was viewed as kind of like a refrigerator, a white appliance.
Sloan brought the notion of annual model changes and exciting colors, and making this year's car faster than last year's car. Indeed, Sloan is credited with having come up with the concept of planned obsolescence in the middle 1920s. Production had caught up with the demand that was out there. Sloan realized that they had to make people want things that they essentially didn't need. And that, along with the practice of consumer credit, which allowed people to buy things that they didn't need, was one of the big steps forward that just turbo-charged the industry for the next 75 years.
BLOCK: Well, GM starts turning out promotional films, and by 1933 they have a film, "The Triumph of America." And let's take a listen. They're praising the Chevrolet brand now as a leading force in a new America.
(Soundbite of promotional film, "The Triumph of America")
Unidentified Man #1: No manufacturer pays his workers more than the makers of Chevrolet. Whole towns, even cities, have been built around its factories.
BLOCK: Oh, I love that delivery, and that's no lie. That was happening all over.
Mr. KITMAN: It was indeed. General Motors, one of its tasks that it set for itself was to be seen as a friendly citizen. I mean certainly in the '30s there was a lot of ill feeling towards corporations, and they really wanted to be seen as part of the fabric of the community and also as quintessentially American.
BLOCK: And GM makes this point over and over in these promotional films. There's one from the '50s where they're claiming one in seven jobs in the United States is connected to the auto industry. This is from 1952. You see a guy driving up in a pickup truck.
(Soundbite of promotional film)
Unidentified Man #2: Pardon us, sir, but would you tell us what business you're in?
Unidentified Man #3: Why, certainly. I'm a farmer.
Unidentified Man #2: And what do you grow on your farm?
Unidentified Man #3: Well, you might say I grow automobiles, because I own part of the four million acres of farmland used to grow raw materials used in motorcars.
BLOCK: Well, General Motors gets its highest market share in the '60s. It has about, what, 50 percent of the market at its peak, I think. Now they're at about 20 percent. And much has been written and talked about, where they went wrong. What are the key factors there? What did they do?
Mr. KITMAN: One popular theory is that the whole influx of the regulatory state as it applied to automobiles. There were very few safety laws, very few emissions laws, no fuel economy standards prior to the late '60s and early '70s. And they invested an intense amount of energy fighting those things. There are those who say that that just - it threw them off their game. You know, people talk about karma. I wonder sometimes if there is corporate karma and whether a hundred years of doing a fair amount of unsavory things, while building some exciting cars, whether General Motors isn't experiencing that now.
BLOCK: Well, Jamie Kitman, thanks a lot.
Mr. KITMAN: Thank you.
BLOCK: Jamie Kitman is the New York bureau chief for Automobile magazine.
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