The General Motors concern summed up the results of the year ahead of schedule: in December the company chose a new leader, and the US government withdrew from its shareholders. Next year for GM will be the beginning of a new era, which it has approached after a protracted crisis and bankruptcy. Lenta.ru decided to recall the history of the largest automobile company of the 20th century and assess how much GM has changed in recent years.

At the end of the 19th and beginning of the 20th centuries, several automobile companies were formed in the United States, which later became giants of the American economy. One of them, General Motors, was already included in the prestigious Dow Jones Industrial Average stock index in the 1920s and quickly entered the international market, purchasing the Australian Holden and the European Vauxhall and Opel.

GM initially chose a different development strategy than its main competitor in the American market, Ford. While the latter relied on the production of one mass model, GM offered customers a wide range - customers could choose cars of various brands and price segments. Thanks to this, by the end of the 1920s, GM took over the title of the world's largest automaker from Ford.

1959 Cadillac 1/2 Eldorado

By the mid-1930s, even the emergence of a powerful new competitor, Chrysler, did not shake GM's position. At the same time, the “big three” concerns took shape that still dominate the automobile industry in the United States - GM, Ford and Chrysler.

During World War II, all US automobile concerns, including GM, enriched themselves through defense orders. But GM's real heyday came in the 1950s: its share of the US market was then approaching 50 percent, and tax contributions to the budget alone amounted to about a billion dollars. The post-war prosperity of the concern, which was based on the growth of the well-being of Americans, became associated with the power of the United States itself. Thus, the company turned from a simple, albeit large, automobile concern into a national phenomenon.

Popular cars had their own fan clubs, and the car became part of the American Dream: it was believed that an American who got rich should definitely buy himself a pink Cadillac so that luck would not turn away from him in the future.

GM consistently occupied first place in the list of the world's largest automakers. This could be compared with the leadership of the United States in the Western world: although America was not its only representative, no one could challenge its primacy.

The power of GM can be judged by the statement of the former head of the company, Charles Wilson. At his Senate confirmation hearing for Secretary of Defense, Senator Robert Hendrickson asked Wilson if he was willing to make a decision that could harm GM's interests. The former head of the company replied that he did not believe in the possibility of such a development of events, “after all, what is good for America is good for General Motors, and vice versa.” The story contains a slightly modified quote: “What’s good for General Motors is good for the United States.”

As soon as Western Europe and Japan recovered from the consequences of the war, the United States began to cede leadership to them in some sectors of the economy. This is especially clear in the automotive industry: in the late 1960s, and especially in the early 1970s, with their “oil shocks” and galloping fuel prices, GM faced competition from European, and a little later, Japanese automakers.

GM market share and ratio to automobile imports

Two other factors also played against GM: arrogance (as a contemporary observer put it , “the company began to believe in its own bombastic press releases”), which prevented it from immediately recognizing the threat, and confusion with the model line. GM united many brands: Chevrolet, Cadillac, Buick, Oldsmobile, Pontiac, GMC. If previously they were divided into market categories, then with the increase in the number of models, finding their own niche for each of them became more and more difficult. This led to internal competition, when GM products competed not with Ford or Chrysler, but with other representatives of its own model line. The result of such rivalry was a drop in sales and a decrease in interest from buyers.

Another danger awaited GM from the trade unions. In 1935, the United Automobile Workers formed and quickly gained enormous influence. After the war, workers obtained significant privileges from GM management, which cost the company considerable losses. Thus, increasing salaries and social benefits for employees reduced the concern’s profits (and sometimes quite significantly), and protests by trade unions against the relocation of factories to other states affected the “flexibility” of the company, depriving it of the ability to quickly respond to market needs.

Since the early 1980s, Japanese companies began not only to export their cars to the United States, but also to open their factories there. As Bloomberg noted , the Big Three expected that competitors would eventually also face the influence of local unions. But the Japanese managed to protect themselves: they located production in states with the strictest anti-union legislation. In addition, leading Japanese companies were guided by different production principles: they adhered to stricter quality standards, hired younger employees, and rethought the assembly line as such - all this allowed them to assemble cars more cheaply and not waste resources on confrontation with workers.

General Motors ended 1981 with losses for the first time in 60 years. Various attempts by top managers to reform the company (including turning to Japanese experience, launching a completely new Saturn brand and a production EV-1 electric car) were similar to throwing and ultimately failed. The Americans turned away not only from GM, but also from the entire Big Three.

Since the early 2000s, specialized publications have speculated about the imminent bankruptcy of one of the giant companies, or even all three. They did not believe in GM's success even though its shares reached their maximum value in 2000.

Comparative graphs of labor costs of the Big Three and Japanese factories in the United States

Ultimately, GM's fate was decided by the financial crisis that hit the United States in 2008. The concern was not ready for it - at the end of 2007, it recorded losses in the amount of $38.7 billion. The growing debt of Americans and the decline in their wealth, as well as rising oil prices, brought GM to the brink of disaster. In 2008, the company began discussing $15 billion in savings. In addition, GM stopped paying dividends and announced plans to cut production in the United States. In November 2008, the concern warned that at the beginning of next year it could be left without funds. At the end of 2008, the company's losses amounted to $31 billion.

With the election of Democrat Barack Obama to the presidency, automakers now have hope for government assistance. In reality, as observers noted, the new owner of the White House took an unexpectedly tough position towards the automobile industry. He did not rule out the possibility of bankruptcy of GM and Chrysler and had absolutely no intention of supporting the management of these companies, which many rightfully considered responsible for the plight of the industry.

In March 2009, the US Treasury Department gave GM 60 days to develop a new strategy, and on June 1 the concern filed for bankruptcy. At that time, GM estimated its assets at $82 billion, and its liabilities and debts at $173 billion. General Motors took fourth place in the list of the largest bankruptcies in the United States - after the collapse of Lehman Brothers, Washingtom Mutual and WorldCom. The collapse of GM occurred against the general background of the search for a way out of the acute phase of the financial crisis, which again emphasized the direct connection between the fate of GM and the entire US economy.

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The revival of the company was made possible thanks to Chapter 11 of the US Bankruptcy Code, which allows for the reorganization of the enterprise. This was eventually done. Forbes about the details of behind-the-scenes negotiations between GM management in the fall of 2013 told One of the architects of the company's salvation, Jay Alix, . When thinking through the reorganization of the concern, Alix, in his own words, took into account its scale - it was simply impossible to quickly cope with the bankruptcy of such a monster. However, delaying the process threatened to ruin the whole undertaking, so Alix proposed, even before the formal filing of the bankruptcy request, to divide GM's assets into viable and non-viable.

As a result, already in July 2009, two companies were formed - General Motors Corporation LLC received healthy assets, and all debts were transferred to Motors Liquidation Company. At first, the main owners of the new structures were the governments of the United States and Canada.

It is noteworthy that even the bankruptcy of GM could not change attitudes towards the company: observers continued to talk about it with great reverence. In the summer of 2009, investor Bill Gross wrote : “I think GM is an indicator of the health of our economy, a blueprint for what will happen to all of us in the future. Their mistakes resemble our mistakes, and their problems in the future will become our problems.”

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America's pride is back in value

GM Concern conducted a successful placement of shares

The updated GM retained the Chevrolet, Cadillac, GMC and Buick brands. The governments of the United States and Canada did not plan to own the company - it needed to be listed on the stock exchange (shares of the former GM were withdrawn from stock exchanges during bankruptcy) and to pay off taxpayers whose funds were used to inject money into GM.

By the spring of 2010, the company reported that it had returned $6.7 billion to the financial departments of the United States and Canada, which were allocated to it last summer. At the same time, the United States continued to control two billion dollars of preferred shares of GM and 61 percent of ordinary shares.

In November 2010, the revamped GM held its IPO, raising over $20 billion. The seller was the state. Despite the comments of skeptics, the company's IPO was a success - investors again believed in its prospects. At the end of 2010, GM sold 8.39 million cars worldwide, only slightly behind the market leader, Toyota.

GM ensured the sympathy of advanced Americans with the release of the Chevrolet Volt hybrid. It became a competitor to the Toyota Prius, which by this time had acquired almost cult status. With the release of a new competitive car, GM proved that after a crisis and bankruptcy the company can regain its technical leadership - which is not an allusion to Obama's first term, when the United States began to gradually emerge from the economic (and some argued, moral) crisis of the last months of George's presidency Bush Jr.?

Chevrolet Corvette Manta Ray Concept 1965 year 1 /2

At the end of 2011, the company reported a net profit of $7.6 billion. At the end of 2012, the state began to get rid of the remaining shares of the concern. The Treasury did not report the number of shares sold, announcing only the cost of the transaction. At the end of this year, the process was completed - the government withdrew from the shareholders. The US budget ultimately spent about $51 billion on the company, of which $40 billion was returned.

As for Canada, it has also repeatedly stated its desire to exit GM shareholders as quickly as possible and with a profit for taxpayers. However, as of today, Canadians still retain 7.2 percent of the company's shares.

Supporters of saving General Motors argue that without government support, a full-fledged bankruptcy, without reorganization, would have caused much greater damage to the economy. Opponents of government intervention in the fate of GM (among them, by the way, was the Republican candidate for president in 2012, Mitt Romney) note that government injections into GM are no different from assistance to the financial sector in the last months of the Bush presidency. Then the expression “too big to fail” even appeared. It was used to explain the decision to support Wall Street, which drew criticism from a large part of society - why should taxpayer funds go to save private companies that were themselves to blame for their plight? And no one disputed that GM itself was largely to blame for its own bankruptcy.

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Having learned about the appointment of 51-year-old Mary Barra to the post of head of GM, the media began to write about the “new face” of the concern, as if forgetting that she had been working there since 1980. A GM “veteran” knows how the company works from the inside and what can be expected from it - it has seen times of prosperity, subsequent decline and finally revival. Now GM, like the entire American industry , is on the rise, but it can no longer achieve its former power, when the company occupied almost 50 percent of the US market: the pink Cadillac is today perceived as kitsch, and not as a symbol of prosperity.

Lenta.ru: Economics: Companies: General America