Billy Durant: Creator of General Motors

Billy Durant: Creator of General Motors

by Lawrence R Gustin

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Overview

Praise for the first edition:

"A fascinating book [and] a sympathetic look at the man who glued General Motors together and in the process made Flint one of the great industrial centers of America."
---Detroit Free Press

"It is refreshing to report that Billy Durant is one of the best researched books dealing with an automotive giant."
---Antique Automobile

"Billy Durant fills in a masterly way the only important void remaining concerning the work of the motorcar pioneers."
---Richard Crabb, author of Birth of a Giant: The Men and Incidents That Gave America the Motorcar

What explains Billy Durant's powerful influence on the auto industry during its early days? And why, given Durant's impact, has he been nearly forgotten for decades?

In search of answers to these questions, Lawrence Gustin interviewed Durant's widow, who provided a wealth of previously unpublished autobiographical notes, letters, and personal papers. Gustin also interviewed two of Durant's personal secretaries and others who had known and worked with the man who created General Motors. The result is the amazing account of the mastermind behind what would become, as the twentieth century progressed, the world's largest company.

Product Details

ISBN-13: 9780472029365
Publisher: University of Michigan Press
Publication date: 10/16/2012
Sold by: Barnes & Noble
Format: NOOK Book
Pages: 304
Sales rank: 554,590
File size: 34 MB
Note: This product may take a few minutes to download.

Read an Excerpt

Billy Durant

Creator of General Motors


By Lawrence R. Gustin

The University of Michigan Press

Copyright © 2008 Lawrence R. Gustin
All rights reserved.
ISBN: 978-0-472-03302-7



CHAPTER 1

The Road Cart


It had started, he remembered, on a September evening in 1886. He was twenty-four years old then, a slightly built, already successful businessman in the old lumber town of Flint, Michigan, and, as usual, he was in a hurry. The board of directors of the city's privately owned gas company was to meet in an hour, and Billy Durant had to get over to the plant, read a meter, and get to the meeting.

His quick, bouncy gait slowed at the city's main intersection, Saginaw and Kearsley streets. He saw his friend Josiah Dallas Dort in the doorway of the hardware at the corner, and there was time for a short chat. And then Johnny Alger, a husky youth who worked for Dort at the hardware, pulled up to the boardwalk in his new two-wheeled road cart.

Alger offered Durant a ride. The cart, he suggested, was an unusual vehicle with a wonderful ride. Durant walked over to have a better look. The cart seemed quite ordinary, if anything a bit flimsy. Alger jumped down and poked a finger at the springs, which were held with stirrup-shaped mounts under the shafts. This was the secret, he said, a unique seat suspension. Durant glanced at his watch; he could use a ride to the gas plant. He squeezed onto the seat next to Alger, waved to Dort, and was on his way.

The seat was barely large enough for two men, and he half expected to be thrown off at any moment. But Johnny was right. The cart did not bounce the rider around as other carts did. And now as he rode to the gas plant, the cart swaying only slightly as Johnny's spirited horse raced along the rough, unpaved main street of Flint, his interest began to rise.

When he stepped down from the cart, he asked Alger where he had bought it. The local agent was H. D. Newman, the tinsmith, he replied. Durant was at Newman's door the next morning. The road cart? Sure, it's being built by the Coldwater Road Cart Company, but Newman could sell him one right here in Flint. That evening, Durant headed for the train station, and by eleven o'clock he was checking into a hotel in Coldwater, a village 120 miles southwest of Flint. Billy Durant, who had sold lumber, groceries, patent medicine, cigars, and real estate in the seven years since he had dropped out of high school, who was now a partner in a thriving insurance agency, had decided to get into the vehicle business.

In the morning he went directly to the Coldwater Road Cart Company factory, a small, old-fashioned carriage shop. He walked in, looked around, saw nobody, opened another door, and found himself in a little carpenter shop, staring directly into the eyes of a middle-aged man with bushy eyebrows. Durant and Thomas O'Brien exchanged introductions. Durant started to talk. He had ridden in one of O'Brien's carts and been so pleased that he wondered whether he might buy a small interest in the business.

"Why not buy it all?" O'Brien asked, almost casually.

Durant was startled. He had very little money.

"It wouldn't take much," O'Brien replied with a shrug.

They stared at each other for a long moment, and then O'Brien excused himself to talk with his partner. Durant plopped himself on a carpenter's bench and waited. A short time later, O'Brien returned with William H. Schmedlen. Durant found Schmedlen to be young, alert, pleasant. They talked for a few minutes about this and that, and then Durant said, "If the business is for sale, what's the price?"

O'Brien and Schmedlen said they would like to talk privately. Within minutes they returned with an offer to sell all the materials in their road cart operation — wood stock, axles, wheels, springs, finished and unfinished vehicles, patterns, dies, the whole works except their tools — for $1,500. The price seemed fair, but was the patent for the spring suspension included? The partners thought they might receive a royalty. Durant hesitated. Finally they included the patent in the deal.

"As I said before, I have very little money, nowhere near enough to make the purchase," Durant continued. "But if you will go down to the office of your attorney with me and execute a bill of sale and assign the patent and deposit all the papers in your bank, I will go to Flint this afternoon and see if I can obtain the money, which must be in your hands within five days or no deal." In that reply, recorded in Durant's autobiographical notes, is much of the spirit that guided his life: Decide quickly, make your pitch, nail down the details, don't worry about the money.

At the attorney's office, the remaining details were worked out. Two days after he had first seen Johnny Alger's road cart, Durant was on a train headed back to Flint with a contract in his pocket for the business of manufacturing them.

In Flint the next morning Durant set out to borrow $2,000. He estimated he would need the additional $500 to move the business to Flint and start operations. He had many connections. His grandfather, Henry Crapo, had once been governor of Michigan. Crapo had died in 1869, but in 1886 the name was still big in town, and several of Billy Durant's uncles and cousins were among Flint's most prominent citizens. Yet Durant would recall that he decided to avoid the several banks in town where his friends and relatives had important positions, reasoning that "if I make a failure of the venture, I will never hear the end of it."

He had no such influence at Citizens National Bank, and so he was soon sitting in the office of Robert J. Whaley, president of the bank, a man he knew only slightly and with whom he had never done business. Durant can be pictured in Whaley's dusty, cluttered office, talking in his notably soft voice, his head thrust forward toward his listener as he talked. He was not quite handsome — his nose was straight but a bit large — but his face looked honest and his dark eyes sparkled. Most of the time he smiled engagingly. The total effect was one of quiet charm and confidence.

Whaley listened to Durant's proposal, then walked him downstairs and directed the cashier to make out a ninety-day renewable note for $2,000 and deposit it in Durant's account. In Durant's mind the loan was so significant that more than half a century later he wrote: "Robert J. Whaley, by reason of his courage and his confidence, is entitled to all the credit for having made possible the creation of a nationwide institution which resulted later in the establishment of 12 industrial institutions in Flint, besides [making it] the birthplace of the largest creation of its kind in the world — the General Motors Corporation."

Leaving the bank, Durant went to the office in downtown Flint where he and I. Wixom Whitehead, an old schoolmate, operated their insurance business. When Dallas Dort walked in, to find out where his friend had been the last few days, Durant announced with elation, "I'm in the manufacturing business," and explained that he had made arrangements to build road carts just like the one young Alger had so proudly displayed.

Dort, a tall, slender, handsome young man, ten months older than Durant, had first met Durant when the hardware store had sold some materials to Durant for a business construction project (one of Durant's many sidelines), and he respected Durant's business acumen. He had also been impressed himself with the road cart's potential. Furthermore, the hardware business was not going well. So he asked if Durant would like a partner. Durant replied that he would be delighted to sell a half interest for $1,000. He had never expected to buy the whole thing in the first place.

Dort went to James Bussey, his senior partner in the hardware store, and told him of his new opportunity. Bussey agreed to release him from his contract and to give him $500 for his share of the business. Returning to Durant with the news, Dort announced that he would take the next train to his home in Inkster and get the other $500 from his mother. "She'll raise the money if she has to mortgage the farm."

If Durant and Dort were pleased with their opportunity in Flint, the reaction to the deal was also favorable in Coldwater. The Coldwater Semi-Weekly Republican reported the sale to "W. C. Durand" in its issue of September 14, 1886, and congratulated O'Brien and Schmedlen on their success.

Durant and Dort were still in the process of organizing their new Flint Road Cart Company when Durant made his first effort to promote and sell the cart. In Durant's own detailed account:

"When the material from Coldwater arrived and Mr. Schmedlen came over to help us get started — as per our agreement — we discovered among the collection two handsome road carts, one particularly attractive, built from open grain white ash — a perfect picture — which I appropriated as my sample ... but where was I to get my audience to demonstrate my ability as a salesman?

"I discovered that most of the county fairs were over on account of the lateness of the season, but in looking over the list I found a big one called the 'Tri-State,' opening in Madison, Wisconsin, on the following Monday. Why they called it the 'Tri-State' I could never understand except that it made it more impressive. They might just as well have called it the 'World's Fair.' As a matter of fact, it was a very popular and well-con-ducted state fair. It was Friday — the fair was to open on Monday, and according to the rule, which proved to be quite flexible, the entries had to be in place by noon of that day.

"I wired my entry and shipped my sample by American Express, leaving that night for Madison, via Chicago. Arriving at my destination early Sunday morning, I found everything in confusion, but during the day located the president of the association, who happened to be the head of a good-sized implement and vehicle jobbing concern. I had the opportunity of telling him what a wonderful cart we were bringing over from Flint at considerable expense, mentioning a few of the outstanding features, adding that there was nothing on the market that would compare with it. Strange to say, I think he believed me....

"Monday came and no cart. Tuesday also came — but no cart. Inquiry developed that Chicago was the transfer point, that the arrival was delayed. ... I succeeded in having the committee postpone the prize from Tuesday until Wednesday afternoon.

"The sample was delivered at Crane & Company's warehouse Wednesday morning, where Mr. Crane was shown something that he had never seen before. I did not have to do much talking. THE CART SOLD ITSELF. We went to the office where we looked at the map, outlined the territory and the contract was drawn with an initial order for 100 carts, with a small check to bind the bargain. Then to the fairgrounds, where we arranged for a series of afternoon tests to properly demonstrate the principle [of the spring suspension]. Early in the afternoon the committee put in an appearance. I let them run the show with my help, with the result that we were awarded the blue ribbon.

"While it was originally intended to call the cart 'The Flint,' we later adopted the slogan 'Famous Blue Ribbon Line' of carriages, built by Durant and Dort, which name was never changed. The company after a few years took first place in volume production and held that position until the horse-drawn vehicle passed out of the picture, supplanted by the automobile."

Leaving the fair with his orders and his blue ribbon, Durant shipped his handsome cart to Milwaukee, where he called on George C. Cribbs & Company. Cribbs was impressed and wanted a carload (thirty-five carts) every ten days. Durant explained that he was just getting started. They worked out a flexible contract, specifying that deliveries would be made as soon as possible.

On his way back to Flint, Durant called on J. H. Fenton of Chicago, who had a wide reputation as a supplier of horse racing sulkies. Fenton looked at the cart, suggested a few minor changes to lighten the weight, and asked that his model carry the name Fenton Favorite.

Clearly, Durant's first instincts had been correct. The little road cart from Coldwater had impressed every important carriage man who had seen it. All he had to do, it seemed, was display the cart and take orders for delivery. Completing his first sales trip, William Crapo Durant was on a train headed for Flint with orders for more than 600 carts. The Flint Road Cart Company had yet to build one.

Durant thought about this on the train. He had done a fine selling job — now it was time to produce. But despite Schmedlen's help, the new company was not ready to build its own carts. By the time the train arrived at the Flint station, he had decided on a course of action. The next morning he knocked on the door of William A. Paterson's carriage factory.

Paterson operated Flint's largest carriage business, employing a dozen workers and producing two buggies a day. The company was the pride of the city: Paterson carriages had a wide reputation for craftsmanship. Durant told Paterson that he was new to the carriage business, that he had orders for 600 carts but no hope of producing them on his own. Would Paterson be interested in building 1,200 carts exactly like the sample? Paterson replied that he would, for $12.50 each, crated at his factory. Durant figured he could sell them at retail for nearly twice that. A contract was signed.

Durant and Dort then formally entered into a partnership, on September 28, officially organizing the Flint Road Cart Company with a $2,000 bank account. At first they rented a little shop in Brush Alley in downtown Flint and used the Durant & Whitehead insurance office as a headquarters. Within a short time they moved their operations into a one-story frame building rented from Paterson behind St. Paul's Episcopal Church downtown. Two months later The Flint Journal reported that the company was "getting out lots of patent road carts these days, and the building just south of the Waverly House, which is being used as a storeroom, is being packed full."

CHAPTER 2

King of the Carriage Makers


When Billy Durant's grandfather, Henry Howland Crapo, arrived in Flint by cutter in January of 1856, he found a settlement of 2,000 people which had incorporated as a city only a few months before. The city could trace its beginnings to 1819 or earlier, when fur trader Jacob Smith set up a trading post on the Saginaw Trail at a shallow crossing of the Flint River. The spot was advantageous because this was as far south as Indians and traders in northern Michigan could travel by canoe before having to walk the final 60 miles to the big trading center of Detroit. By setting up business here, Smith could beat the competition and save his customers a long walk. Still, settlement did not begin in earnest until John and Polly Todd set up a tavern across the river from Smith's store in 1830, followed several years later by a land office.

Alexis de Tocqueville, visiting the Flint River settlement in 1831 during his travels through the American wilderness to gather material for his Democracy in America, recorded one surprise: He was frightened half out of his wits when he stumbled against a settler's pet bear in the dark ("What a devil of a country this is, where one has bears for watchdogs"). But soon the wilderness began to give way to settlers from New York State and New England.

Henry Crapo's family had not been unanimously enthusiastic about his decision to move out to what they considered to be a wilderness frontier. Most of them would have preferred to remain in civilized New Bedford, Massachusetts, the old whaling port where Crapo was a leading businessman. Crapo had been New Bedford's elected town clerk, treasurer, and tax collector, he had invested in whaling ventures, and he was manager of an insurance company and owner of a nursery specializing in fruit and ornamental trees. He was already in his fifties when he became so heavily involved in Michigan forest land that he felt he had to move to Flint permanently. Most of the family joined him there in 1858.

Crapo did well in Flint. He became one of the city's leading lumber barons, operating three mills and building an early railroad into the city. By 1860 he was mayor, and from there he advanced quickly to state senator. In 1864 he became the Republican nominee for governor and won the election. He was reelected in 1866. Crapo's business and political leadership qualities were enormous. A century after his death in 1869, Henry Crapo was still regarded by local historians as one of Flint's most important historical figures.


(Continues...)

Excerpted from Billy Durant by Lawrence R. Gustin. Copyright © 2008 Lawrence R. Gustin. Excerpted by permission of The University of Michigan Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents

Contents Update Foreword Prologue One. The Road Cart Two. King of the Carriage Makers Three. The Horseless Carriage Comes to Flint Four. Buick: Rags to Riches Five. “I Must Have a Consolidation Six. “Never Mind, We're Still Running Seven. The Bankers Take Over Eight. Durant's “New Baby”— Chevrolet Nine. “I Took General Motors Back from the Bankers Today Ten. Durant's Rule — and Another Collapse Eleven. A Last Empire Created and Lost Epilogue Chapter Notes and Bibliography Index

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