Durant, William Crapo

views updated Jun 27 2018

DURANT, WILLIAM CRAPO

Born in Boston, Massachusetts, on December 8, 1861, William Crapo Durant (1861–1947) grew up in Flint, Michigan. His parents divorced after his father went bankrupt in the late 1860s, and his mother moved the family to Michigan. There she reunited with her father, who had prospered in the lumber business and served as mayor of Flint and governor of Michigan. Durant left high school early to work in his grandfather's lumberyard and at various other jobs. One of those jobs was as a salesman for a local cigar manufacturer.

Durant was a natural salesman. "Let the customer sell himself," was his stated philosophy. In 1885, after finding a unique suspension system that minimized bounce, he organized the Durant-Dort Company to make carriages. This company was his first real success, and it became one of the leading manufacturers of horse-drawn carriages. By 1900 the company was the largest carriage manufacturer in the United States.

But Durant saw that the future of transportation rested in the automobile rather than the horse-drawn carriage. In 1904 he took over management of the Buick Motor Company, which had financial problems. That year, he arranged for Buick to participate in the New York Automobile Show and took orders for 1108 cars, more than 25 times the number of cars the company had ever manufactured. To raise the capital necessary to respond to this increased need, Durant sold Buick stock to anyone in Flint who was interested in buying. Production at the Buick Company went from 725 cars in 1905, to 1400 in 1906, to 4641 in 1907. Buick reached the position of number one in the country in 1908, with a production of 8820 cars, outselling Ford Motor Company and Cadillac combined.

Durant tried to buy Ford in 1907, but the bid failed when Henry Ford (1863–1947) insisted on being paid in cash. The next year Durant formed General Motors Company in response. Durant's concept for his new company was to be a total supplier of automobiles from the car itself to its parts and service. Durant added Cadillac, Oldsmobile, Oakland (Pontiac) and other lesser companies to the original Buick at General Motors. Durant was a great salesman, but not so great at purchasing companies. Many of his acquisitions were over-priced or ill advised. In 1910 General Motors was heavily in debt and under a cash crunch. Bankers rescued the company from its financial predicament, but the price was a loss of control for Durant.

Still believing in the automobile, Durant joined forces with race car driver Louis Chevrolet (1879–1941) and established Chevrolet Motor Company in 1911. Chevrolet was an instant success with the Model 490, which cost more than Ford's Model T, but offered greater refinements and comfort. The loan the bankers had made to General Motors expired in 1915, and with it, Durant's prohibition from involvement in the company. With the help of the Du Pont family, Durant was able to regain control of General Motors in 1916. Chevrolet was brought into the General Motors family of automobiles, and the company prospered.

Durant, however, was unable to effectively deal with the company's stock price problems during the Panic of 1920. General Motors stock fell from $42 per share in March to just $14 per share in October. Durant felt personally responsible to many of the shareholders, as he had made personal commitments to friends and neighbors to sell the stock. He tried valiantly to prop up the stock price and save his friends' investments, but he failed.

When the Du Ponts discovered Durant's position, they forced him out of General Motors in order to protect their own investment. Oddly, Durant could have weathered all the problems with stock prices and the company if he had just left the situation alone. By 1926, just six years later, General Motors stock was trading at $210 per share. From April to November of 1920, Durant lost over $90 million. Adjusted for inflation, that amount would have been over $1 billion in the 1990s. Many believe this to be the largest relative loss of money in the history of the stock market.

Durant made another attempt to succeed in the automobile industry, starting Durant Motors in 1921, but it failed to establish itself in the market. By the time of the stock market crash of 1929, Durant Motors was already shaky and it lost ground steadily until its dissolution in 1933. By 1935 Durant had declared bankruptcy. He dabbled in a number of other business ventures, including a bowling alley, but none were particularly successful. He died in New York on March 18, 1947.

See also: Automobile Industry, General Motors Corporation

William Crapo Durant

views updated Jun 11 2018

William Crapo Durant

The American industrialist William Crapo Durant (1861-1947) was the founder of General Motors, an automobile manufacturing company.

William C. Durant was born in Boston, Mass., on Dec. 8, 1861. He grew up in Flint, Mich., where he became a leading carriage manufacturer. In 1886 he organized the Durant-Dort Company and helped to make Flint the carriage capital of the nation.

Durant acquired control of the Buick Motor Car Company in 1904 and revived it; by 1908 Buick was one of the four leading automobile companies. Durant had a vision of the boundless possibilities of the automobile, particularly the moderate-priced car, and attempted to capitalize on these possibilities by establishing a large-scale enterprise based on volume production. He intended that his company would be well financed, market a variety of automobiles, and produce many of its own parts.

After an attempt to buy Ford Motor Company in 1907 failed because Henry Ford wanted to be paid in cash, Durant established the General Motors Company the next year. He began with the Buick and added Cadillac, Oldsmobile, Oakland (Pontiac), and other lesser companies. Durant overextended himself, and by 1910 General Motors needed the intervention of a bankers' syndicate to lift the burden of debt. Durant returned to the automobile business in 1911 with the Chevrolet car. In 1916, with the backing of the Du Pont family, he recovered control of General Motors.

In 1919 General Motors was one of the largest American industrial enterprises, but Durant exercised little control over its operation; General Motors was too decentralized to be effective. When the Panic of 1920 occurred, Durant was overcommitted in the stock market. He tried unsuccessfully to support the price of General Motors stock; he was forced out of the company in 1920 by the Du Ponts, who wanted to protect their sizable investment.

The remainder of Durant's life was anticlimactic. In 1921 he started Durant Motors, which failed to become a major automobile producer. Durant Motors was already shaky when the 1929 crash occurred; the Depression then sharply reduced automobile sales and resulted in 1933 in dissolution of the firm. Durant was bankrupt by 1935. During his remaining years he engaged in a variety of business enterprises but without marked success. He died in New York City on March 18, 1947.

Durant was a pioneer in the automotive industry, and his most notable creation, General Motors, has dominated the automobile market since. Some of his chance ideas, such as the entry of General Motors into the manufacture of refrigerators, were highly successful. However, Durant never succeeded in organizing and administrative structure adequate for the giant enterprise he founded, and the task of converting General Motors into an enduring monument was left to his successors.