Billy, Alfred, and General Motors | William Pelfrey

Summary of: Billy, Alfred, and General Motors: The Story of Two Unique Men, a Legendary Company, and a Remarkable Time in American History
By: William Pelfrey

Introduction

Welcome to the absorbing tale of two distinctive pioneers, Billy Durant and Alfred Sloan, who played pivotal roles in shaping General Motors and the American auto industry. This summary unveils the fascinating journey of these two great innovators: Durant, a visionary entrepreneur with unyielding zeal, and Sloan, a methodical businessman known for his organizational acumen. Discover the dramatic rise, fall, and revival of both Durant and Sloan within the GM Corporation as they navigate industry consolidation, aggressive acquisitions, and the innovative advancements that forged a true American business empire in the early 20th century.

The Dueling Legacies of General Motors’ Founders

William C. Durant, founder of General Motors, died in poverty after losing two battles for control of the company. Despite his entrepreneurial flair, obituary writers at the time chose to focus on his failures. Alfred Sloan, his successor as CEO, was more methodical and left a lasting legacy of effective management and a dominant market share. This book explores the contrasting lives of the two men and the impact they had on GM and American business.

General Motors: Rise and Fall

General Motors was established as a dominant force in the US economy by 1920. The company had a socially responsible work model and was a corporate innovator. However, the founder, Durant, was more of an entrepreneur than a manager, leading to organizational issues. Sloan, the vice president, saw this as a major problem, including Durant’s inability to understand the importance of combining forces. Despite Durant’s success, Sloan had serious doubts about the company’s future.

Billy Durant: The Making of a Businessman

The book delves into the life of Billy Durant, tracing his lineage to an alcoholic father and a hardworking grandfather who laid the foundation for a prosperous timber business. At 16, Billy dropped out of school to work in his grandfather’s lumberyard, where he honed his salesmanship skills, eventually starting his own ventures and turning around a struggling water company. A successful entrepreneur, Billy seemed to have inherited his father’s speculative ways and personal charm. Despite his shortcomings, he managed to establish General Motors and change the face of the automobile industry.

Durant’s Journey to Vertical Integration

In 1886, after sensing the potential in a newly designed horse-drawn vehicle that used springs to absorb the shock of the road, Durant immediately bought the company. He went on to promote the invention and secured orders for 600 units without having a production line. With the help of a local carriage maker, and by designing an assembly line, they successfully produced 4000 units in the first year earning $18,000. However, his production contractor betrayed him by contacting an important customer behind his back, cutting Durant out, which led him to realize that vertical integration was a more reliable organizational model.

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