For most of the 20th and 21st century, General Motors Company was the largest and most successful motor-vehicle manufacturer in the world. It began as a composition of several subsidiary automobile entities when its founder, William Durant, purchased thirty companies during the first two years of operation. The multinational corporation now operates manufacturing and assembly factories and distribution centers throughout the United States, Canada, and in 37 countries worldwide.
Headquartered in Detroit, GM's major products include automobiles, trucks, vehicle components, and engines, as well as financial services. Although GM has only one car, the Chevrolet Impala, on the list of the best-selling cars in history, the company has a long and fascinating past that began in 1908 and continues to this day. Many people in the US and Canada have owned a car produced by General Motors and even those who never purchased a GM vehicle are aware of the brand.
Despite GM’s long history and notoriety, there are numerous things that people do not know about the company and the products it has produced. From strange business decisions to hush-hush scandals, the company has a lot of dirt hiding under the rug. Here are 20 strange facts General Motors doesn't want anyone to know or, at least, would prefer that most people forget.
20 GM Failed to Finance a Purchase of Ford
The history of General Motors is one of acquisitions and the take-over of many well-known car manufacturers. On September 17, 1908, the day after William C. Durant capitalized GM as a holding company, he purchased Buick Motor Company and shortly after that, acquired more than twenty companies, including Oakland, now known as Pontiac, Cadillac, Oldsmobile, and McLaughlin of Canada.
What few people know (except automobile historians) is GM also wanted to take over Ford—and nearly succeeded. In 1909, Durant offered Henry Ford $8 million for his stock in the company and Ford agreed. Durant also convinced the GM board of directors to make the purchase. However, Durant’s New York bankers squashed the deal when they refused to give him the loan needed to make the purchase.
19 GM Forced to Stop Using the Mark of Excellence
Since its formation in 1908, General Motors has had a long history of producing first-rate vehicles and the company has taken great pride in their high standards. To reassure customers that they were buying quality, GM added a decal to the door jamb of each new car. It displayed the logo with the words “Mark of Excellence” below the GM initials.
However, during the 1970s, the quality of GM cars began to deteriorate. Perhaps the best example was the Chevy Impala that had numerous faults, such as leaky windows and dashboards that developed cracks shortly after purchase. GM realized that the Mark of Excellence symbol made a mockery of the company, so it phased out the decal’s use and concentrated instead on improving the vehicles to the standards they had promised.
18 General Motors vs. Ralph Nadar
In 1965, Ralph Nadar published his controversial book, Unsafe at Any Speed. In the book, Nader attacked the entire Detroit auto industry, claiming that car manufacturers were unwilling to spend money on safety features and improvements. General Motors, represented by the Chevrolet Corvair model, was singled out as one of the worst examples.
The year after the book’s release, several media companies accused General Motors of attempting to discredit Ralph Nadar. They claimed GM hired a private investigator to follow him and set up compromising situations to discredit him. Nadar took General Motors to court over invasion of privacy. GM settled out of court and Nadar was awarded $425,000 in compensation.
17 Defective Ignition System Controversy
While the Ralph Nadar controversy threatened to tarnish General Motor’s reputation, a defective ignition system proved to be a far greater threat. In May 2014, the National Highway Traffic Safety Administration (NHTSA) penalized GM $35 million for failing to recall cars that were identified as having a faulty ignition switch. The switches had been installed on the Pontiac G5 and Solstice, the Chevrolet Cobalt and HHR, and the Saturn Ion and Sky.
The penalty was the maximum that NHTSA regulators could impose for such a violation. General Motors did not recall the cars even though they had known for a decade that the switches were defective. They were also forced to pay compensation to victims and 79 customer lawsuits claiming economic losses totaling nearly $10 billion.
16 GM Built Machines for Germany during WWII
During WWII, many businesses, like General Motors, changed their entire production to making products required by the US and the Allies. The goods included trucks, tanks, airplanes, artillery, shells, and marine diesel engines. GM delivered more material to the Allied forces than any other manufacturer from the United States, estimated at over $12 billion.
However, GM also had a lucrative partnership with Germany to produce military vehicles. They used an Opel three-ton truck called Blitz throughout the war and GM even opened a new factory in Brandenburg, a location less likely to experience aerial bombardment, to continue producing the vehicles without interruption.
15 GM's Recall in 2014 Cost $4.1 Billion
The largest automaker in the US recalled a record 30.4 million cars and trucks in 2014. The recalls cost the company $4.1 billion in victim compensation, repair costs, and other expenses. The most significant loss came from the cost to repair the cars recalled during the year, which added up to nearly $2.8 billion.
The recalls impacted operating profits, causing them to plummet, even though GM car sales worldwide set a record. The company was helped by a healthy US economy, the rebound in car sales, and further growth in China sales, which had become GM's largest market. Worldwide, it sold 9.9 million cars with a revenue of $155 billion, an increase of 2% over the record it set in 2013.
14 Founder William "Billy" Durant was Fired Twice
While Henry Ford focused on a single car, the Model T, William Durant founded General Motors as a holding company and quickly expanded by acquiring several brands including Buick, Oakland (the father of Pontiac), Cadillac, and Oldsmobile.
Durant continued to expand by buying more companies, but some, like Cartercar and Elmore, were failures. Cadillacs and Buicks were selling well but the company was losing money. In 1911, a group of investors from Boston successfully ousted Durant from the company he founded.
Durant then founded Chevrolet and it was a huge hit. He bought up a significant portion of GM stock and, in 1916, took back his post as president. However, bad decisions would plague him again, so the board voted him out for the second time. His last endeavor was as the manager of a bowling alley.
13 GM on the Brink of Insolvency in 1920
In 1920, when the GM board of directors removed Durant for the second time as president the company was on the brink of insolvency. He started another car company, Durant Motors and created Star, an "assembled" car, built from parts supplied by various outside companies.
However, Durant had a weakness for gambling and stock speculation. When he was still playing the markets in 1928, Durant controlled nearly $1 billion in stocks but, like many other investors who had most of their assets in the market, he lost it all in October 1929. Durant filed for Chapter 11 in 1936. William Durant lived until 1947, surviving on his GM pension.
12 GM Hit Hard by Small Fuel-Efficient Imports in 1980
General Motors not only suffered from financial woes in the early 1920s but encountered difficult times in the early 1980s. Although the oil embargo ended in March 1974, the resulting recession and economic shock waves continued for nearly a decade. Chevrolet, the top-selling US brand, built more than 2.5 million vehicles in 1973 but by 1975, production had plummeted to just over 823,000 units.
A decline in oil production that began in 1978 led to prices that more than doubled by 1980. The higher rates triggered a rapid decline of Detroit's auto industry, while imports of the smaller, fuel-efficient cars not available from domestic manufacturers became the favorites of US car buyers. GM reported its first unprofitable year since 1921, with a net loss of more than $700 million.
11 United Auto Workers (UAW) Strike Cost $2 Billion
In 1998, a 54-day strike by the United Auto Workers (UAW) union involved 3,400 workers at Flint Metal Center and 5,800 workers from Flint East for a total of 9,200 people. The impact was felt throughout General Motors, stopping production entirely at 30 assembly plants and 100 parts plants.
An agreement was reached by the UAW and GM on July 29, 1998, featuring compromises by both sides. The workers agreed to work rule changes including a 15 percent increase in mandatory daily output of parts, while GM committed to keeping several of the striking factories open and to investing $180 million in new equipment for one of them. The strike cost GM approximately $2 billion in profits.
10 GM Bailout of $13.4 Billion from the US Treasury in 2008
In November of 2008, the Big Three US automakers, represented by GM CEO Rick Wagoner and the CEOs of Chrysler and Ford, appeared before Congress to request $25 billion in government assistance for the automobile industry. They warned that Chrysler LLC and General Motors faced insolvency, the result of which would be the loss of over 1 million jobs.
The Ford Motor Company had already cut costs, so it didn't need any funding. However, it asked to participate so it wouldn't suffer a competitive disadvantage with the other two subsidized companies. The Treasury Department loaned money to the Big Three, bought shares in Chrysler and GM, and provided incentives to encourage new car purchases.
9 GM files for Chapter 11 in 2009
Spring of 2009 had been a difficult time for General Motors, when they filed for Chapter 11 on June 1, 2009. What was once inconceivable, the move was unavoidable after years of losses and market share declines highlighted by a dramatic plummet in sales. GM stock had dropped to less than $1 a share, its lowest price since the Great Depression
The government poured another $30 billion into GM to fund operations and assist during its restructuring. When it emerged from reorganization, company ownership was divided among four entities. The US government owned 60.8%. Canada's government owned 11.7%. The UAW union had a 17.5% share and unsecured bondholders had a 10% share.
8 US Treasury Loses Money on GM
According to Investopedia and many economists, “a free market economy or laissez-faire capitalism is an economy with unobstructed competition and only private transactions between buyers and sellers. However, a more inclusive definition should include any voluntary economic activity so long as it is not controlled by coercive central authorities,” i.e. the government.
Although the United States was founded on the principle of a free market economy, by necessity, it evolved into a modified model, using taxpayer’s money to preserve capitalism and promote competition. Throughout US history, examples of government bailouts include The Great Depression, the savings and loan bailout of 1989, and the Freddie Mac and Fannie Mae government-backed mortgage lenders. The General Motors bailout was among the most expensive. The Treasury only recouped about $39 billion of the approximately $50 billion it invested in GM.
7 GM Chevy Tried a Dial Steering System
Although it pales in comparison to many of GM’s economic problems throughout its history, the Dial Steering System is fascinating but also something that the company would prefer no one remembers. It was perhaps the most unique feature of the 1960s Chevy concept truck, the Turbo-Titan III.
Replacing the conventional steering column and wheel, the unit sat on a pedestal in front of the driver. The pedestal pivoted forward and back along with the panel, providing the most comfortable driving position. The platform’s power steering was operated by twin dials mounted on a padded vinyl (leather was not all the rage yet). The panel also contained the automatic transmission quadrant along with the turn signals.
6 GM Chevy Turbo-Titan III Failed
In the 1950s and 1960s, turbine power initially showed promise as a replacement for the conventional internal combustion engine. The Big Three Automakers, as well as other companies, built and tested several vehicles. However, none of the concept vehicles made it to production when turbine power proved ill-suited to land-going vehicles.
General Motors entry in the turbine power arena was the 1966 Chevy Turbo-Titan III concept. A formidable truck, the Titan III featured several futuristic innovations of the day. The massive front intakes housed popup-popout, sideways-opening headlights and the exterior was covered in fiberglass. The electrically powered tilting cab enabled easy access to the turbine. The steering system used two small wheels connected to the power steering and the driver sat comfortably in NASA-like seats.
5 Chevrolet Corvette Racing Kit Didn’t Sell
It is not well known, and perhaps GM prefers it that way, that from 1999 to 2001, Chevrolet sold a C5 kit as part of an attempt to build a reputation of Corvette as a racing car. Purchased directly from GM’s service and parts division, the car came incomplete, allowing racers to build their vehicle—without having to purchase a finished C5—and then customize it.
It was delivered with a rolling chassis, motor, drivetrain, and other small parts. Body panels were also included but due to some logistical problems, customers didn’t get them until weeks after the order. Chevrolet sold only 42 kits and decided to stop the program after only three years.
4 Embarrassing Chevrolet Volt Song and Dance
E for Electricity, V for ‘Vehicularity’ – that’s not a word but it’s okay, the Volt will change the world someday. The Chevrolet Volt song may be GM’s most embarrassing endeavor.
Jalopnik wrote: “First there was the Chevy Volt song, an embarrassingly...hipsterish non-jingle which left everyone who heard it wondering where they could get a refund on the government bailout they paid for with their taxes. Now there's its accompanying [number] — the Chevy Volt dance — straight from the floor of the LA Auto Show. Set to that same saccharine swill song, the dance offers all the hackneyed awkwardness of failed off-Broadway musical numbers with the pointless waste of time and money. There are choreographed dancers, backflips, break dancing with stalls, and YMCA-like spelled out letters. In short, it's horrible.”
3 1971 Chevrolet Vega Failed before It Started
When Chevrolet Division Manager John DeLorean (more famous for his failed DeLorean DMC-12) first evaluated the new 1971 Chevrolet Vega prototype, the front-end of the car disconnected and fell to the ground. Perhaps this is an exaggeration but it was an indication of more troubles ahead.
Feeling pressure from increasing sales of fuel-efficient imports, GM rushed the introduction of the Vega with only one innovative feature: the all-aluminum, 2.3-liter, four-cylinder engine. Regrettably, aluminum engine block technology had barely emerged back in 1971 and the unlined and unprotected cylinder walls of Vega engines scored almost instantly. Disappointed Vega owners ditched the brand and by the mid-1980s, the car was being abandoned so quickly that some salvage yards in Southern California wouldn't accept any more.
2 The 1980-1985 X-Cars had the Most Recalls
The "X-Body" front-drive cars—Chevrolet Citation, Pontiac Phoenix, Buick Skylark and Oldsmobile Omega—introduced in 1980 replaced GM's rear-drive vehicles and promised a change in the corporation’s approach to designing and building cars. When first introduced, the X-Cars experienced some success. Chevy alone sold an amazing 811,540 Citations during the 1980 model year.
However, reliability plagued the design. The four- and six-cylinder cars suffered more recalls and rampant problems than any other GM vehicle program. Buyers complained of fragmented transmissions, unstable suspension systems, and chattering brakes. The cars experienced so many nagging faults and an endless number of recalls that sales plunged by the third year of production. Despite the poor performance, through 1985, a few million were sold, but they only negatively impacted GM’s reputation for building reliable cars.
1 1991-1995 Saturns Were Mediocre
A few vehicles are exceptional in both performance and appearance, while others excel in one characteristic but not the other. The GM Saturn was mediocre in both traits. Plastic panels were used on the Saturn for their resistance to collision damage but they faded and discolored quickly and with time, they also cracked. Furthermore, large gaps developed between the plastic body panels that were poorly mounted on a steel space-frame.
The four-cylinder engines were noisy and lacked both power and fuel-efficiency. Saturn's cars fell short of the competition from Mazda, Honda, Toyota, and several others. Although GM set up a new assembly plant, dealers, and a "no haggle" sales scheme for Saturn, the vehicles disappointed buyers.
Sources: Money Inc, TFL Truck, Jalopnik, Driving, and Truck Trend.