General Motors was founded in 1908 in Flint, Michigan, as a holding company for Buick, then controlled by William C. Durant, and acquired Oldsmobile later that year. The next year, Durant brought in Cadillac, Elmore, Oakland and several others. In 1909, General Motors acquired the Reliance Motor Truck Company of Owosso, Michigan, and the Rapid Motor Vehicle Company of Pontiac, Michigan, the predecessors of GMC Truck. A Rapid became the first truck to conquer Pikes Peak in 1909. Durant lost control of GM in 1910 to the company's bankers, because of the large amount of debt taken on in its acquisitions.

Durant left the firm and helped establish the Chevrolet Motor Company in 1911 with brothers Gaston and Louis Chevrolet. He returned to head GM in 1916, with financing by Pierre S. du Pont. Chevrolet entered the General Motors fold in 1917; its first GM car was the 1918 Chevrolet 490. Du Pont removed Durant from management in 1920, and various Du Pont interests held large or controlling share holdings until about 1950.

In 1918 GM purchased the McLaughlin Motor Car Company of Oshawa, Ontario, Canada, manufacturer of the McLaughlin-Buick automobile, and renamed it General Motors of Canada Ltd., with R.S. "Colonel Sam" McLaughlin as its first president.

GM surpassed Ford Motor Company in the 1920s thanks to the leadership of Alfred Sloan. While Ford continued to refine the manufacturing process to reduce cost, Sloan was inventing new ways of managing a complex worldwide organization, while paying special attention to consumer demands. Car buyers no longer wanted the cheapest and most basic model; they wanted style, power, and prestige, which GM offered them. Thanks to consumer financing, easy monthly payments allowed far more people to buy GM cars, while Ford was moralistically opposed to credit.

1930s diversification

During the 1920s and 1930s, General Motors bought control of the Yellow Coach bus company, and helped create Greyhound bus lines. They replaced intercity train transport with buses, and established subsidiary companies to buy out streetcar companies and replace the rail-based services as well with buses. GM formed United Cities Motor Transit in 1932 (see General Motors streetcar conspiracy for additional details).

In 1930, GM also began its foray into aircraft design and manufacturing by buying Fokker Aircraft Corp of America (U.S. subsidiary of Fokker) and Berliner-Joyce Aircraft, merging them into General Aviation Manufacturing Corporation. Through a stock exchange GM took controlling interest in North American Aviation and merged it with its General Aviation division in 1933, but retaining the name North American Aviation. In 1948, GM divested NAA as a public company, never to have a major interest in the aircraft manufacturing industry again.

General Motors bought the internal combustion engined railcar builder Electro-Motive Corporation and its engine supplier Winton Engine in 1930, renaming both as the General Motors Electro-Motive Division. Over the next twenty years, diesel-powered locomotives — the majority built by GM — largely replaced other forms of traction on American railroads. (During World War II, these engines were also important in American submarines and destroyer escorts.) Electro-Motive was sold in early 2005.

World War II

General Motors produced vast quantities of armaments, vehicles and even aircraft during World War II. During the war, the U.S. auto companies were concerned that the Nazis would nationalize American owned factories in Germany. In the spring of 1939, the Nazis had assumed day to day control of American owned factories in Germany, but decided against nationalizing them.

GM's William P. Knudson served as head of U.S. wartime production for President Franklin Roosevelt who had referred to Detroit as the Arsenal of Democracy. Today, Detroit is the headquarters for the U.S. Army Tank-Automotive and Armaments Command, known as TACOM.

Nevertheless, while General Motors has claimed that its German operations were outside its control during World War II, this assertion appears to be contradicted by available evidence. General Motors was not just a car company that happened to have factories in Germany; G.M. management from the top down had extensive Nazi connections, both on a business and personal level. [1]

American G.M. vice-president Graeme K. Howard (later colonel Graeme K. Howard) was a committed Nazi, with such views expressed in his book America and the New World Order. Hitler awarded G.M. boss James D. Mooney the Order of Merit of the Golden Eagle for his services to Nazi Germany. General Motors’ internal documents show a clear strategy to profit from their German military contracts even after the outbreak of war between America and Germany.

Defending the German investment strategy as “highly profitable”, G.M.’s Alfred P. Sloan told shareholders in 1939 that G.M.’s continued industrial production for the Nazi government was merely sound business practice. In a letter to a concerned shareholder, Sloan said that the manner in which the Nazi government ran Germany "should not be considered the business of the management of General Motors...We must conduct ourselves as a German organization. . . We have no right to shut down the plant." [2]

After 20 years of researching General Motors, Bradford Snell stated that: "General Motors was far more important to the Nazi war machine than Switzerland ... Switzerland was just a repository of looted funds. GM was an integral part of the German war effort. The Nazis could have invaded Poland and Russia without Switzerland. They could not have done so without GM.” [3]

Post-war growth

At one point GM had become the largest corporation registered in the United States, in terms of its revenues as a percent of GDP. In 1953 Charles Erwin Wilson, then GM president, was named by Eisenhower as Secretary of Defense. When he was asked during the hearings before the Senate Armed Services Committee if as secretary of defense he could make a decision adverse to the interests of General Motors, Wilson answered affirmatively but added that he could not conceive of such a situation "because for years I thought what was good for the country was good for General Motors and vice versa". Later this statement was often misquoted, suggesting that Wilson had said simply, "What's good for General Motors is good for the country." At the time, GM was one of the largest employers in the world – only Soviet state industries employed more people. On December 31, 1955, General Motors became the first American corporation to make over one billion dollars in a year.