WEBVTT - GM Navigates A Treacherous Road 0:00:04.400 --> 0:00:07.800 Welcome to tech Stuff, a production from I Heart Radio. 0:00:12.119 --> 0:00:14.960 He there, and welcome to tech Stuff. I'm your host, 0:00:15.160 --> 0:00:18.479 Jonathan Strickland. I'm an executive producer with iHeart Radio and 0:00:18.480 --> 0:00:22.319 I love all things tech. And this is Part three, 0:00:23.160 --> 0:00:26.520 the part three and final parts so far of my 0:00:26.640 --> 0:00:29.920 series about General Motors. So if you're just tuning in, 0:00:30.160 --> 0:00:33.160 you might want to seek out the first two episodes 0:00:33.240 --> 0:00:36.280 in this series that published over the last two weeks. 0:00:36.520 --> 0:00:40.280 In those episodes, I explain how William C. Durant started 0:00:40.440 --> 0:00:44.640 General Motors by first buying Buick, then creating a holding 0:00:44.680 --> 0:00:48.120 company called General Motors, and then by buying up a 0:00:48.120 --> 0:00:51.959 whole bunch of other car companies like Oldsmobile and Cadillac, 0:00:52.240 --> 0:00:55.200 as well as other companies that specialized in making various 0:00:55.280 --> 0:00:58.160 parts that were used in cars. I also talked about 0:00:58.160 --> 0:01:01.120 how Durant's investors kicked him out of the company for 0:01:01.160 --> 0:01:04.360 accruing debt, and how Durant was able to buy his 0:01:04.440 --> 0:01:07.479 way back into the company, and then how he got 0:01:07.560 --> 0:01:11.759 kicked out of it again. Then I talked about Durant's successor, 0:01:12.080 --> 0:01:16.080 Alfred Sloan, who was skilled in reducing costs and increasing 0:01:16.080 --> 0:01:21.160 efficiency and maximizing profits, but was very much not interested 0:01:21.200 --> 0:01:25.120 in stuff like, you know, worker conditions and compensation. I 0:01:25.160 --> 0:01:28.360 also talked about gms controversial activities leading up to World 0:01:28.360 --> 0:01:31.360 War Two, and how the company appeared to play at 0:01:31.400 --> 0:01:34.560 least some part in helping Hitler's war machine get started 0:01:34.600 --> 0:01:38.319 in Germany before doing the same thing in the United States. 0:01:38.560 --> 0:01:42.080 So today we're going to pick up post World War Two. 0:01:42.240 --> 0:01:44.959 For the most part, we're gonna do some backtracking. I 0:01:45.000 --> 0:01:49.000 apologize for that. It's just it's a complicated story. Anyway. 0:01:49.080 --> 0:01:52.560 While Sloan definitely had some qualities that I personally find 0:01:52.800 --> 0:01:56.480 pretty distasteful, there was no denying that he was brilliant 0:01:56.600 --> 0:02:00.600 at managing a company. Sloan had organized General Motors not 0:02:00.720 --> 0:02:04.280 by function, so it wasn't like it was organized by 0:02:04.320 --> 0:02:07.840 sales and then marketing and then manufacturing across all the 0:02:07.880 --> 0:02:11.400 different brands. Instead, he organized it by division, and so 0:02:11.480 --> 0:02:15.680 each division would oversee a specific brand of cars. So 0:02:15.919 --> 0:02:18.919 the Buick line had its own sales department, its own 0:02:18.919 --> 0:02:22.639 marketing department, it's own manufacturing departments, so on, and Cadillac 0:02:22.720 --> 0:02:26.400 was the same in Pontiac and Oldsmobile, etcetera. So each 0:02:26.440 --> 0:02:29.400 division had its own general manager, who was responsible for 0:02:29.480 --> 0:02:34.000 keeping down costs and maximizing profits, and Sloan essentially created 0:02:34.120 --> 0:02:38.839 the model that many, if not most, modern big industrial 0:02:38.919 --> 0:02:43.000 corporations followed today. Much of the design he brought over 0:02:43.120 --> 0:02:45.640 from DuPont. He had kind of picked that up from 0:02:45.760 --> 0:02:49.960 DuPont's businesses, but he added his own elements to it 0:02:50.040 --> 0:02:52.480 as well. And as such, in business, there are a 0:02:52.560 --> 0:02:57.040 lot of people who study Sloan's you know, leadership strategy 0:02:57.080 --> 0:03:01.880 and organizational strategy. In fact, if you remove people from 0:03:01.960 --> 0:03:06.440 the equation, if you forget that people exist, then Sloan's 0:03:06.480 --> 0:03:09.600 models are really effective. It's kind of like looking at 0:03:09.600 --> 0:03:12.760 a logic puzzle where you need to reduce one component 0:03:13.120 --> 0:03:15.799 in this case that would be you know, loss or cost, 0:03:16.480 --> 0:03:20.359 and maximize another component that would be profit. But trouble 0:03:20.440 --> 0:03:22.760 starts to pop up when you happen to think of 0:03:22.800 --> 0:03:26.760 things like salaries as part of your costs and people 0:03:27.000 --> 0:03:31.280 as assets. That kind of thinking where you have removed 0:03:31.280 --> 0:03:35.480 yourself from thinking about the human condition. Uh, that doesn't 0:03:35.480 --> 0:03:37.920 always end well. It tends to lead to things like 0:03:38.040 --> 0:03:42.040 unionization and strikes as people say, hey, we aren't just 0:03:42.120 --> 0:03:45.360 numbers on a spreadsheet now. General motors certainly found this 0:03:45.440 --> 0:03:47.600 to be true. And while the company didn't employ the 0:03:47.640 --> 0:03:52.320 same violent tactics that say Ford did, the disputes with 0:03:52.440 --> 0:03:56.960 organized workers were pretty dramatic. But let's push forward, and 0:03:57.000 --> 0:03:59.320 that means having to go back a bit. See One 0:03:59.360 --> 0:04:02.840 of the really important people in General Motors history whom 0:04:02.880 --> 0:04:06.760 I have not mentioned yet is Harley Earl, a professional designer. 0:04:07.120 --> 0:04:10.960 He was born in eighteen ninety three in Hollywood, California. 0:04:11.400 --> 0:04:15.400 His father, Jacob W. Earl, was a coach builder in 0:04:15.440 --> 0:04:19.160 the nineteenth century, and he owned a business called fittingly 0:04:19.320 --> 0:04:23.120 enough Earl Coach Works. Oh And while Harley would call 0:04:23.240 --> 0:04:27.120 California home, Jacob was actually from somewhere else. He was 0:04:27.200 --> 0:04:31.800 from Cadillac, Michigan. Because when we talk about automotive efforts 0:04:31.800 --> 0:04:35.000 in the United States, it always comes back to Michigan, 0:04:35.440 --> 0:04:38.680 and Jacob's son, Harley, would be a huge influence on 0:04:38.760 --> 0:04:43.720 Cadillac's as well as Michigan and other parts of General 0:04:43.760 --> 0:04:46.400 Motors as well. So after the turn of the century, 0:04:46.720 --> 0:04:49.599 Jacob began to expand his business a little bit. While 0:04:49.640 --> 0:04:52.839 he had started out repairing and building horse drawn coaches, 0:04:53.279 --> 0:04:56.760 he branched out by working on early automobiles and it 0:04:56.839 --> 0:04:59.479 was clear to him that the car was going to 0:04:59.520 --> 0:05:03.080 replace the older forms of transportation. So with that in mind, 0:05:03.560 --> 0:05:09.120 Jacob founded Earle Automotive Works, a custom shop in Hollywood, California, 0:05:09.160 --> 0:05:13.200 where the main customers were producers and movie stars and studios. 0:05:13.440 --> 0:05:16.280 In fact, a lot of of the company's early customers 0:05:16.279 --> 0:05:20.120 were producers who needed specialty vehicles for the motion pictures, 0:05:20.160 --> 0:05:25.120 like horse drawn vehicles, like like like Roman chariots. So 0:05:25.160 --> 0:05:28.520 there's nothing like really getting into the early automotive industry 0:05:28.520 --> 0:05:32.520 and still having to put aside time to design, you know, 0:05:32.720 --> 0:05:36.120 a chariot or two. Harley Earl would work in his 0:05:36.240 --> 0:05:39.360 father's shop after school, where he got hands on experience 0:05:39.520 --> 0:05:42.880 learning about mechanical systems. But he was also a keen 0:05:42.960 --> 0:05:47.919 academic student and he attended Stanford University. Didn't complete it, 0:05:48.080 --> 0:05:51.279 but he went there and he had a major in engineering. 0:05:51.640 --> 0:05:53.760 He also would occasionally get into a bit of trouble 0:05:53.920 --> 0:05:57.040 by apparently borrowing cars as dad had been working on, 0:05:57.520 --> 0:06:00.680 and then racing those cars without his dad knowledge, and 0:06:00.720 --> 0:06:04.080 frequently winning. There's a story that goes that his dad 0:06:04.120 --> 0:06:07.880 found out about this after reading an article in a 0:06:07.920 --> 0:06:14.160 local newspaper that detailed Harley Earl's victorious run with a 0:06:14.200 --> 0:06:17.080 car that most certainly did not belong to Harley Earl. 0:06:17.880 --> 0:06:22.360 By eighteen, Earl's automotive companies business was really booming, and 0:06:22.440 --> 0:06:25.159 Harley Earl decided to drop out of college in order 0:06:25.200 --> 0:06:27.720 to work at the shop full time. He became known 0:06:27.760 --> 0:06:31.400 for working on and designing custom made car bodies that 0:06:31.520 --> 0:06:34.760 really stood out, particularly in a world where the model 0:06:34.839 --> 0:06:37.920 t Ford had created a sort of uniformity in the 0:06:37.960 --> 0:06:42.480 automotive industry. In nineteen nineteen, a man named Don Lee, 0:06:42.839 --> 0:06:46.400 the owner of the Don Lee Coach and Body Works company, 0:06:46.440 --> 0:06:50.240 acquired the Earl Automotive Company, but he kept Jacob and 0:06:50.560 --> 0:06:53.560 Son in charge of it. And now I suddenly want 0:06:53.600 --> 0:06:57.159 to sing Andrew Lloyd Weber lyrics for Jacob and Son. 0:06:57.320 --> 0:07:01.480 But anyway, Harley Earl became the chief designer for this 0:07:01.560 --> 0:07:05.159 branch of Lee's company, and Lee was the leading distributor 0:07:05.360 --> 0:07:08.880 of General Motors Cadillac line on the West Coast. So 0:07:08.960 --> 0:07:11.880 by the mid nineteen twenties, Harley Earl was quite the 0:07:11.880 --> 0:07:15.640 figure in Hollywood. He had made friends with various celebrities 0:07:15.640 --> 0:07:18.480 and studio heads through his work on custom car bodies, 0:07:18.880 --> 0:07:23.240 and he was kind of living the celebrity lifestyle. One 0:07:23.280 --> 0:07:26.160 thing Harley Earl adopted early on that would set him 0:07:26.160 --> 0:07:28.880 apart from other designers is that he would design a 0:07:28.920 --> 0:07:31.480 car body and then he would sculpt his design in 0:07:31.600 --> 0:07:34.520 three dimensions using clay. Now, at this time in car 0:07:34.600 --> 0:07:39.360 design that just wasn't standard operating procedure, but Earl proved that, 0:07:39.440 --> 0:07:42.640 you know, realizing designs and three dimensions really helped him 0:07:42.680 --> 0:07:46.000 create evocative body designs, and no doubt it helped him 0:07:46.160 --> 0:07:49.600 close numerous deals as well when clients got a chance 0:07:49.640 --> 0:07:52.560 to see the model and then imagine themselves tooling down 0:07:52.600 --> 0:07:56.480 Sunset Boulevard and a full sized version. Earl's approach would 0:07:56.480 --> 0:07:59.080 be the one that would see widespread adoption throughout the 0:07:59.120 --> 0:08:03.880 car industry. Moving forward. In nive Larry Fisher, the head 0:08:03.960 --> 0:08:07.360 of the Cadillac division at General Motors, tapped Harley Earl 0:08:07.440 --> 0:08:10.800 to design the companion make to the Cadillac. This one 0:08:10.920 --> 0:08:14.960 was called the Lassalle. So if you remember, GM had 0:08:15.000 --> 0:08:18.600 identified that there were price gaps between their different brands 0:08:18.680 --> 0:08:21.960 that they could target, but they didn't want to make 0:08:22.040 --> 0:08:25.640 certain brands more expensive or other brands less expensive because 0:08:25.640 --> 0:08:27.960 that could change the perception of the brand. So instead 0:08:28.280 --> 0:08:32.840 they introduced companion brands to fill in those gaps. Lisalle 0:08:33.320 --> 0:08:38.360 was the slightly less expensive version of Cadillac, not really version, 0:08:38.400 --> 0:08:42.480 I should say companion to Cadillac. They were distinct. So 0:08:42.520 --> 0:08:45.920 Earl agreed and he created four different Clay models. He 0:08:46.000 --> 0:08:49.240 had a touring car, a sedan, a roadster, and a coupe, 0:08:49.720 --> 0:08:53.200 and Alfred Sloan would approve all four of those models 0:08:53.240 --> 0:08:57.640 for production. In ninety seven, Earl joined General Motors as 0:08:57.640 --> 0:09:00.000 the head of a design division at that time called 0:09:00.240 --> 0:09:03.640 Art and Color. He was one of the earliest, perhaps 0:09:03.679 --> 0:09:07.920 first professional designers to work in the automotive industry. Now, 0:09:08.000 --> 0:09:10.480 I'm not going to go through all the different designs 0:09:10.480 --> 0:09:15.160 that Earl created, because again, that would be an exhaustive podcast. 0:09:15.240 --> 0:09:17.480 Also wouldn't be very effective because I don't know if 0:09:17.480 --> 0:09:20.719 you noticed, but this is an audio podcast, and you 0:09:20.720 --> 0:09:23.120 should really spend your time looking at some pictures of 0:09:23.160 --> 0:09:26.600 cars that Earl had a hand in designing. That would 0:09:26.640 --> 0:09:29.280 be far more effective. I should also point out that 0:09:29.720 --> 0:09:33.040 as his career went on, he spent less time hands 0:09:33.080 --> 0:09:37.400 on designing vehicles and more time overseeing teams of designers 0:09:37.400 --> 0:09:40.319 who were doing that. Although he still had the authority 0:09:40.360 --> 0:09:44.760 to approve or deny any style changes. It's important to 0:09:44.800 --> 0:09:47.880 know that it was these designs that Earl came up 0:09:47.880 --> 0:09:51.520 with that aligned with Alfred Sloan's vision of bringing new 0:09:51.600 --> 0:09:55.400 styles of cars to market year after year, thus creating 0:09:55.440 --> 0:09:59.920 almost a kind of planned obsolescence approach to the auto industry. Now, 0:10:00.000 --> 0:10:02.440 it wasn't that the cars would just poop out after 0:10:02.640 --> 0:10:05.680 a year of operation. They didn't. They were, for the 0:10:05.720 --> 0:10:09.920 most part, reliable machines if you maintain them properly. It 0:10:09.960 --> 0:10:13.839 was more that by creating a signature style that would 0:10:13.920 --> 0:10:17.720 change over time, GM also created an incentive to buy 0:10:17.800 --> 0:10:20.680 new cars, at least for the people who could afford 0:10:21.040 --> 0:10:23.800 to do that kind of thing. You know, cars have 0:10:23.840 --> 0:10:26.959 always been tied to status symbols, and having a car 0:10:27.040 --> 0:10:29.760 with a distinctive modern look as a real sort of 0:10:29.840 --> 0:10:33.120 social cachet to it. Earl ushered in a new era 0:10:33.440 --> 0:10:37.640 in industrial design, creating an approach to integrated design that 0:10:37.800 --> 0:10:41.440 used a single team to work on all aspects of 0:10:41.480 --> 0:10:45.320 a specific product, from the way it looks to how 0:10:45.360 --> 0:10:48.960 it operates and handles, to how it's marketed and priced. 0:10:49.440 --> 0:10:52.440 This unified method meant that everyone was on the same 0:10:52.480 --> 0:10:55.080 page when it came to the project. There was no 0:10:55.160 --> 0:10:58.080 worry about handing this off to a different team and 0:10:58.080 --> 0:11:00.520 then seeing all of your hard work get is handled 0:11:00.559 --> 0:11:03.720 by them. It was Earl who designed features that would 0:11:03.800 --> 0:11:07.360 later become iconic in the automotive world, such as the 0:11:07.400 --> 0:11:10.520 curled tail lights on Cadillacs in the late nineteen forties 0:11:10.920 --> 0:11:14.240 or the fins on Cadillacs not long after. Those were 0:11:14.360 --> 0:11:17.960 from Harley Earl. Earl was also an early pioneer in 0:11:18.040 --> 0:11:21.440 concept cars. So, for those unfamiliar with that term, a 0:11:21.520 --> 0:11:25.720 concept car is a showcase vehicle. It's not intended to 0:11:25.800 --> 0:11:28.960 go into production. It's not meant to be a vehicle 0:11:29.000 --> 0:11:32.360 that the common person could purchase at some point, so 0:11:32.400 --> 0:11:34.840 you should never expect to see a concept car in 0:11:35.080 --> 0:11:38.200 a line in a car dealership, parking lot or anything 0:11:38.240 --> 0:11:42.400 like that. Rather, these cars show off design elements and 0:11:42.440 --> 0:11:46.720 technologies that might find their way into later production vehicles. 0:11:46.840 --> 0:11:50.400 And often these concept cars wouldn't even be street legal 0:11:50.600 --> 0:11:54.920 as designed, so it's meant to show possibility, but not 0:11:55.360 --> 0:11:57.600 you know, a guarantee that this is what you're going 0:11:57.640 --> 0:12:00.720 to see in the dealerships the following year. It's a 0:12:00.880 --> 0:12:03.160 way to get ideas off the ground and get the 0:12:03.160 --> 0:12:06.520 automotive world excited about those ideas. So one of the 0:12:06.559 --> 0:12:11.080 earliest concept cars, in fact, uh it's often cited as 0:12:11.120 --> 0:12:16.800 the first concept car was the Buick Wide Job from 0:12:16.920 --> 0:12:20.199 nineteen thirty eight. It was one that Hurly Earl worked on. 0:12:20.679 --> 0:12:23.679 The Wide Job was a two door convertible, had some 0:12:23.679 --> 0:12:27.040 pretty cool features like wrap around bumpers, and even had 0:12:27.040 --> 0:12:30.600 electric windows, which was pretty novel for the time, and 0:12:30.640 --> 0:12:32.840 many of the cars features would find their way into 0:12:32.880 --> 0:12:35.960 future production cars. As for the Wide Job itself, Earle 0:12:36.200 --> 0:12:39.640 would drive it around for many many years. Uh it 0:12:39.760 --> 0:12:42.760 belongs in the museum and now it's in one. It 0:12:42.840 --> 0:12:45.480 is not an exaggeration to say that the big reason 0:12:45.559 --> 0:12:48.079 GM was able to overtake and hold onto the number 0:12:48.120 --> 0:12:50.760 one car company in the United States was in large 0:12:50.800 --> 0:12:54.480 part thanks to Earl's design team. By nineteen forty, that 0:12:54.559 --> 0:12:57.520 team had grown large enough to warrant a new facility, 0:12:57.559 --> 0:13:01.320 But World War Two changed things dramatically. GM would initially 0:13:01.360 --> 0:13:04.560 resist the push to switch over to wartime production, but 0:13:04.640 --> 0:13:08.640 once it did, nearly all of the company's manufacturing capabilities 0:13:08.720 --> 0:13:12.960 were redirected to building vehicles, engines, and other material for 0:13:13.040 --> 0:13:16.080 the US war effort, at least in this country. To 0:13:16.120 --> 0:13:20.240 hear about how GM's subsidiary Opal played a part producing 0:13:20.280 --> 0:13:23.720 material for the Access Powers, you should listen to the 0:13:23.840 --> 0:13:27.560 previous General Motors episode. Harley Earl made waves in the 0:13:27.600 --> 0:13:30.839 business world in general, and the automotive industry in particular 0:13:31.200 --> 0:13:34.520 when he began hiring women designers starting in the early 0:13:34.640 --> 0:13:37.320 nineteen forties. Not at the time such a thing was 0:13:37.440 --> 0:13:40.920 unheard of, but Earl insisted on it. And you could 0:13:40.920 --> 0:13:43.559 also make at least some argument that a little bit 0:13:43.559 --> 0:13:45.840 of this might have been by necessity, because a lot 0:13:45.920 --> 0:13:48.840 of male engineers were drafted to support the United States 0:13:48.880 --> 0:13:52.160 in World War Two. But Earl's efforts to bring women 0:13:52.320 --> 0:13:55.440 onto teams didn't end with World War Two, and he 0:13:55.520 --> 0:13:58.760 even formed an all women team of designers to work 0:13:58.760 --> 0:14:02.960 on vehicles in the night teen fifties, which was so 0:14:03.040 --> 0:14:07.680 newsworthy that it's embarrassing because it just points out how 0:14:08.040 --> 0:14:10.480 much of a disparity there was between men and women 0:14:10.640 --> 0:14:14.360 in the workplace in the nineteen fifties. He maintained that 0:14:14.480 --> 0:14:17.600 including multiple points of view really helps the best ideas 0:14:17.720 --> 0:14:20.280 rise to the top, which is a philosophy I happen 0:14:20.360 --> 0:14:22.480 to share. It's one of the big reasons that I 0:14:22.480 --> 0:14:26.440 feel inclusion and diversity are great things to embrace, because 0:14:26.480 --> 0:14:29.720 not only does it help address inequities that have existed 0:14:29.720 --> 0:14:32.680 for far too long, but we all benefit when everyone 0:14:32.720 --> 0:14:35.320 gets a chance to contribute. Anyway, let's get back to 0:14:35.400 --> 0:14:38.800 General Motors, because now we're at the point where World 0:14:38.840 --> 0:14:41.600 War two has ended, so we're caught up now. In 0:14:41.760 --> 0:14:46.080 nineteen forty six, Alfred P. Sloan stepped down as CEO 0:14:46.200 --> 0:14:49.120 of General Motors. He was, however, still chairman of the 0:14:49.160 --> 0:14:52.200 board and he would remain so until nineteen fifty six, 0:14:52.400 --> 0:14:55.480 and even then he was elected honorary chairman, which was 0:14:55.520 --> 0:14:58.120 a position he held until he passed away a decade 0:14:58.240 --> 0:15:02.680 later at the age of ninety. In ninety seven, General 0:15:02.720 --> 0:15:06.960 Motors opened a new automobile factory in Van Nuys, California. Now, 0:15:06.960 --> 0:15:10.320 originally this plant would be in charge of manufacturing trucks 0:15:10.400 --> 0:15:14.040 under the Chevrolet brand, but later it would produce iconic 0:15:14.200 --> 0:15:18.440 cars like the Camaro, the ol Camino, the Firebird, the 0:15:18.480 --> 0:15:22.160 Monte Carlo, and more. The plant remained in operation for 0:15:22.200 --> 0:15:25.440 about forty years, but GM would shut it down in 0:15:25.600 --> 0:15:30.000 nineteen two. Now, I think we could mark nineteen fifty 0:15:30.080 --> 0:15:33.640 as sort of being the beginning of the Golden Age 0:15:33.680 --> 0:15:37.800 of automobiles, or at least the automobile industry. Cars represented 0:15:37.840 --> 0:15:41.600 the platform upon which most of the cutting edge technology sat. 0:15:42.200 --> 0:15:45.440 That's where you would see cool tech was in cars. 0:15:45.520 --> 0:15:49.280 That was like the number one spot. Detroit, Michigan was 0:15:49.320 --> 0:15:52.760 the technological center of the United States at this point 0:15:52.760 --> 0:15:55.440 in history, and it would remain so for a couple 0:15:55.480 --> 0:15:58.400 of decades until some eggheads out in California began to 0:15:58.440 --> 0:16:03.000 create what would become Silicon Valley. In nineteen fifty, Michigan 0:16:03.160 --> 0:16:06.640 had more millionaires in it than any other state in 0:16:06.680 --> 0:16:11.040 the United States, mostly thanks to the automotive industry. Cars 0:16:11.280 --> 0:16:14.400 were king. When we come back, we'll learn about what 0:16:14.560 --> 0:16:17.520 happened to GM over the following decades, with a few 0:16:17.520 --> 0:16:21.760 shoutouts to some specific makes and models. But first let's 0:16:21.800 --> 0:16:32.680 take a quick break. We're back and heading into the 0:16:32.760 --> 0:16:36.680 nineteen fifties. GM was one of the largest employers in 0:16:36.720 --> 0:16:39.600 the world at that time. It was certainly the biggest 0:16:39.640 --> 0:16:43.040 employer in the United States. It had more than five 0:16:43.200 --> 0:16:48.440 hundred seventy five thousand employees in nineteen fifty five. That 0:16:48.480 --> 0:16:52.760 meant it employed twice as many people as the next 0:16:52.960 --> 0:16:57.320 largest company in the US, which was US Steel. The 0:16:57.400 --> 0:17:00.400 next car company on the list that year would top 0:17:00.400 --> 0:17:03.080 out at number four, That was Chrysler, with a hundred 0:17:03.200 --> 0:17:08.879 sixty seven thousand or so employees. GM was dominating. In fact, 0:17:08.920 --> 0:17:11.960 in nineteen fifty five, the company reported that after taxes, 0:17:12.160 --> 0:17:14.160 it would take in a profit of more than one 0:17:14.440 --> 0:17:17.639 billion dollars, the first U S company to hit a 0:17:17.800 --> 0:17:21.280 billion dollar profit in a year. They would also become 0:17:21.320 --> 0:17:23.960 the first company to have to pay a billion dollars 0:17:24.000 --> 0:17:27.240 in taxes, which will be an interesting fact to reflect 0:17:27.240 --> 0:17:30.000 on when we get to the early two thousands and beyond. 0:17:30.840 --> 0:17:34.679 That's foreshadowing something else that loomed over GM in the 0:17:34.720 --> 0:17:39.639 nineteen fifties was an escalating legal battle. In nineteen forty nine, 0:17:39.680 --> 0:17:43.320 the federal government sued the E. I. DuPont, de Nemour 0:17:43.520 --> 0:17:47.879 and Company. Now you might remember way back in part 0:17:47.920 --> 0:17:51.400 one of this series that the DuPont family was largely 0:17:51.440 --> 0:17:56.280 responsible for helping GM founder William Durant return to GM, 0:17:56.320 --> 0:17:59.440 only to subsequently forced Durant out once it appeared that 0:17:59.520 --> 0:18:03.520 Durant was going to continue accruing debt well the DuPonts 0:18:03.560 --> 0:18:07.880 remained major investors in GM, and by nineteen forty nine 0:18:07.880 --> 0:18:10.879 they owned around twenty three percent of the company. The 0:18:10.960 --> 0:18:14.600 US government alleged that the DuPonts were using this ownership 0:18:14.640 --> 0:18:18.480 to leverage GM to purchase paint and fabric primarily from 0:18:18.600 --> 0:18:22.400 DuPont owned businesses, meaning that the DuPonts were making use 0:18:22.480 --> 0:18:26.560 of anti competitive practices. In fact, by nineteen forty seven, 0:18:26.600 --> 0:18:30.320 nearly seventy percent of all the paint GM purchased was 0:18:30.359 --> 0:18:34.160 from DuPont and nearly of all the fabric was from 0:18:34.240 --> 0:18:37.480 DuPont as well. The lawsuit in nineteen forty eight was 0:18:37.520 --> 0:18:41.960 a big publicized deal. Harry Truman's administration had filed the suit, 0:18:42.040 --> 0:18:44.679 and nineteen forty eight was an election year in the US, 0:18:45.040 --> 0:18:50.080 so Truman's platform included a strong stance against monopolies and trusts, 0:18:50.119 --> 0:18:53.720 and GM and DuPont were kind of in his sights. Now, 0:18:53.720 --> 0:18:57.000 The initial case failed to bring out any indictments, but 0:18:57.080 --> 0:19:01.040 then the US filed a civil case against DuPont in 0:19:01.160 --> 0:19:04.399 nineteen forty nine, and GM was a co defendant in 0:19:04.440 --> 0:19:08.000 that case. That case didn't actually go to trial until 0:19:08.080 --> 0:19:12.800 nineteen fifty two because Justice moves at a certain pace 0:19:13.400 --> 0:19:16.960 here in the US. The trial stretched on for more 0:19:17.000 --> 0:19:20.600 than a year. It ended in December nineteen fifty three, 0:19:20.680 --> 0:19:23.800 and it wasn't until the following year when Judge Walter 0:19:24.000 --> 0:19:27.720 Labi ruled in favor of the defendants in favor of 0:19:27.840 --> 0:19:31.600 DuPont and GM, but the US government appealed this ruling 0:19:31.640 --> 0:19:34.440 to the Supreme Court. By this time we're talking about 0:19:34.520 --> 0:19:38.880 the Eisenhower administration. That Truman administration has long gone by now, 0:19:39.480 --> 0:19:42.719 and over two days in nineteen fifty six, both sides 0:19:42.760 --> 0:19:45.280 got to argue their case in front of the Supreme Court, 0:19:45.600 --> 0:19:48.359 and in nineteen fifty seven the court ruled in favor 0:19:48.480 --> 0:19:52.160 of the US government, so they reversed the decision. At 0:19:52.200 --> 0:19:55.639 that stage, this case went back down to the district courts, 0:19:55.680 --> 0:19:58.080 which were now tasked with the duty of figuring out 0:19:58.440 --> 0:20:02.280 how were the DuPonts going to extricate themselves from their 0:20:02.320 --> 0:20:06.840 ownership of that of General Motors. This trial happened in 0:20:06.920 --> 0:20:11.280 nineteen fifty nine. Once again we have Judge Labay overseeing 0:20:11.320 --> 0:20:14.560 the case. This included arguments that selling off the large 0:20:14.680 --> 0:20:17.480 number of shares of General Motors could cause the value 0:20:17.640 --> 0:20:22.000 of the company's stocks to plummet, and because GM was 0:20:22.040 --> 0:20:25.560 such a huge employer in the United States, that in 0:20:25.600 --> 0:20:29.680 turn could lead to a general recession and layoffs and 0:20:30.480 --> 0:20:34.840 essentially doomsday. So Labi ruled that the DuPonts wouldn't have 0:20:34.920 --> 0:20:37.320 to get rid of their stake in GM if they 0:20:37.320 --> 0:20:41.680 passed the voting rights for their shares to DuPont shareholders 0:20:42.040 --> 0:20:45.800 and then maintain a greater distance from GMS activities. But 0:20:45.960 --> 0:20:48.640 that wasn't good enough for the US government, which by 0:20:48.640 --> 0:20:52.000 this time was going into another election year, and so 0:20:52.200 --> 0:20:55.600 the US government appealed this decision to the Supreme Court, 0:20:56.000 --> 0:20:59.720 which heard the case again or this new case connected 0:20:59.760 --> 0:21:03.240 to the previous one, and the court determined that, contrary 0:21:03.280 --> 0:21:07.520 to Laby's ruling, DuPont had to be forced to divest 0:21:07.840 --> 0:21:11.960 all GM stocks entirely. Congress, meanwhile, helped ease this a 0:21:11.960 --> 0:21:15.080 little bit by scaling back the tax burden on the 0:21:15.119 --> 0:21:18.440 sale of stocks, which otherwise could have cost the DuPonts 0:21:18.480 --> 0:21:22.320 about a billion dollars just in you know, selling those stocks. 0:21:23.119 --> 0:21:27.520 So the DuPonts divested themselves of that stake gradually in 0:21:27.800 --> 0:21:32.399 various sales that concluded in nineteen sixty five, with the 0:21:32.480 --> 0:21:36.680 final two point three million shares they still owned in GM, 0:21:36.720 --> 0:21:39.960 so from start to finish, this whole process took more 0:21:40.160 --> 0:21:44.520 than fifteen years. Now in those fifteen years, a lot 0:21:44.680 --> 0:21:48.159 was also happening at General Motors. The company introduced the 0:21:48.200 --> 0:21:52.159 Corvette at the Motorama Auto Show in nineteen fifty three. 0:21:52.480 --> 0:21:56.920 This car had fiberglass body panels, which was new, had 0:21:56.960 --> 0:22:00.720 a six cylinder engine under the hood, which is not 0:22:00.880 --> 0:22:03.680 as powerful as a lot of people were hoping for. 0:22:04.240 --> 0:22:07.960 The original model was at two speed automatic transmission, and 0:22:08.080 --> 0:22:12.240 GMS Chevrolet made three hundred of the original Corvettes, all 0:22:12.280 --> 0:22:15.639 of them with white exteriors and red interiors. Out of 0:22:15.640 --> 0:22:18.960 those three hundred, GM was able to sell one three 0:22:18.960 --> 0:22:23.520 of them. The Corvette start wasn't exactly auspicious, but obviously 0:22:23.560 --> 0:22:27.600 the company didn't just abandon the idea. Unlike the experience 0:22:27.640 --> 0:22:30.919 of driving a later Corvette, it took a while for 0:22:31.000 --> 0:22:33.720 the actual brand to get up to speed, and to 0:22:33.760 --> 0:22:36.320 be fair, the old six cylinder Corvettes took about eleven 0:22:36.359 --> 0:22:39.720 seconds to accelerate to six emiles per hour around seven 0:22:39.800 --> 0:22:43.879 kilometers per hour. The following year, GM moved production to 0:22:43.920 --> 0:22:47.919 a manufacturing facility in Missouri with the capacity to produce 0:22:47.960 --> 0:22:50.840 ten thousand vehicles per year, but due to low demand, 0:22:51.040 --> 0:22:54.280 it only produced around three thousand, six hundred cars in 0:22:54.400 --> 0:22:58.600 nineteen fifty four. Then GM switched gears, so to speak, 0:22:58.960 --> 0:23:01.760 in nineteen fifty five five, and the new Corvettes would 0:23:01.800 --> 0:23:05.640 have V eight engines, which boosted the car's horsepower considerably 0:23:06.000 --> 0:23:08.439 and also the performance so it drove more like a 0:23:08.480 --> 0:23:11.760 true sports car. And the nineteen fifty six model would 0:23:11.760 --> 0:23:14.720 have a newly designed front end and sides that had 0:23:14.760 --> 0:23:17.960 scalped curves, and it gave the Corvette a really sleek 0:23:18.040 --> 0:23:21.560 and futuristic kind of appearance. And each subsequent year the 0:23:21.600 --> 0:23:25.160 car would get redesigns, and frequently those redesigns also included 0:23:25.200 --> 0:23:29.280 ways to boost the car's horsepower, which transformed the Corvette 0:23:29.320 --> 0:23:32.560 from a sub standard sports car to a decent sports 0:23:32.560 --> 0:23:35.080 car to one of the premier sports car lines in 0:23:35.119 --> 0:23:39.399 the United States in general, the nineteen fifties saw GM 0:23:39.480 --> 0:23:42.560 introduce a lot of daring and iconic designs thanks to 0:23:42.720 --> 0:23:46.080 Harley Earl's teams. Those tail fins we associate with the 0:23:46.160 --> 0:23:49.639 nineteen fifties come from there. In fact, my favorite car 0:23:49.760 --> 0:23:53.920 from GM ever came out during this time period. It's 0:23:53.920 --> 0:24:00.159 the nineteen fifty nine Cadillac Fleetwood Series SEV. This ing 0:24:01.000 --> 0:24:05.240 is an enormous monster of a vehicle. Huge, it's heavy, 0:24:05.320 --> 0:24:08.440 it's got the fins. But the reason why I love 0:24:08.520 --> 0:24:12.040 it is because it happens to be Doc Hopper's car. 0:24:12.160 --> 0:24:14.760 In the Muppet movie. Doc Hopper was the bad guy, 0:24:15.160 --> 0:24:18.359 and I always thought his Cadillac was just the most 0:24:18.400 --> 0:24:23.720 incredible looking car anyway. Harley Earl retired from General Motors 0:24:23.760 --> 0:24:25.960 in nineteen fifty eight when he reached the age of 0:24:26.000 --> 0:24:29.639 sixty five. It was a mandatory retirement, and his successor 0:24:30.160 --> 0:24:34.800 was William or Bill Mitchell. Mitchell had joined Harley's team 0:24:34.840 --> 0:24:37.480