General Motors Corporation

“ Chevrolet, Pontiac, Oldsmobile and General Motors Parts are divisions of General Motors, but they operate substantially independently of each other. The corporation manufactures automobiles, trucks and other merchandise which are sold to dealers in Washington. However, all of these articles are manufactured in other States. In order to carry on the sale, in Washington, of the products of Chevrolet, Pontiac, Oldsmobile and General Motors Parts, the corporation maintains an organization of employees in each of these divisions on a national, regional and district level. ”

“ The District Court found 'that the government has proceeded diligently and expeditiously in its suit to divorce General Motors Acceptance Corporation from General Motors Corporation.' There is room for argument that this statement is markedly generous to the government, inasmuch as the civil suit against General Motors was not instituted until almost two years after the entry of the consent decree and only three months prior to the limiting date in paragraph 12. ”

“ Finally, it is conceded that General Motors is intensely concerned that each of its dealers has an adequate 'profit opportunity' (see Finding 17) , a concern which necessarily involves consideration of the price realized by dealers. ”

“ Beginning in the late 1950's, 'discount houses' engaged in retailing consumer goods in the Los Angeles area and 'referral services' [3] began offering to sell new cars to the public at allegedly bargain prices. Their sources of supply were the franchised dealers. By 1960 a number of individual Chevrolet dealers, without authorization from General Motors, had developed working relationships with these establishments. A customer would enter one of these establishments and examine the literature and price lists for automobiles produced by several manufacturers. ”

“ Zone manager O'Connor did not regard his instructions from Detroit as authorizing him to go that far, and he was of the view that 'the general letter (to all dealers) didn't suggest any such thing.'↑ We refer to this without considering whether General Motors could lawfully have taken such action.↑ James Roche testified, 'It is not (General Motors') practice to threaten dealers with termination of their franchise.' Good dealers and dealer locations, he said, are hard to come by. In many dealerships, General Motors itself has invested substantial funds. ”

“ The zone manager warned him at the 1935 contract renewal meeting to the effect that if he expected to continue as a Chevrolet dealer he had better use GMAC at least 50%. Again he experienced difficulties with Chevrolet. This time cars of wrong colors and models were shipped to him and unordered accessories in great quantities were forced upon him. ”

“ Paragraph 35 states that the purpose of the defendants was to monopolize and control the business of financing the trade and commerce in new and used General Motors automobiles. Paragraph 70 alleges that dealers have complied with the defendants' coercive plan in order to save substantial investments in their businesses, paragraph 71 states that the effect of the conspiracy has been to restrain and burden unreasonably the interstate trade and commerce in General Motors automobiles, and paragraph 72 is a restatement of paragraph 34. ”

“ With respect to the transactions in category (2) (General Motors Parts Division Sales) , it appears that the offices and warehouses operated by the Parts Division in Seattle, Washington, and in Portland, Oregon, create a situation strikingly similar to that in Norton where the Massachusetts firm maintained an outlet in Chicago, Illinois. ”

“ Perhaps what grated most was the demand that they 'precondition' cars so purchased-make the hopefully minor adjustments and do the body and paint work necessary to render a factory-fresh car both customer- and road-worthy. ”

“ Competitors did obtain higher percentages of the General Motors business in later years, although never high enough at any time substantially to affect the dollar amount of du Pont's sales. Indeed, it appears likely that General Motors probably turned to outside sources of supply at least in part because its requirements outstripped du Pont's production, when General Motors' proportion of total automobile sales grew greater and the company took its place as the sales leader of the automobile industry. ”

“ With a million jobs at stake, I refused to let that happen. In exchange for help, we demanded responsibility. We got workers and automakers to settle their differences. We got the industry to retool and restructure. Today, General Motors is back on top as the world’s number one automaker.
Chrysler has grown faster in the U.S. than any major car company. Ford is investing billions in U.S. plants and factories. And together, the entire industry added nearly 160,000 jobs. We bet on American workers. We bet on American ingenuity. And tonight, the American auto industry is back. ”

“ That report makes clear that more than just a profitable investment was contemplated. A major consideration was that an expanding General Motors would provide a substantial market needed by the burgeoning du Pont organization. Raskob's summary of reasons in support of the purchase includes this statement: 'Our interest in the General Motors Company will undoubtedly secure for us the entire Fabrikoid, Pyralin (celluloid) , paint and varnish business of those companies, which is a substantial factor.' (Emphasis added.) ”

“ The power car carries two gasoline engines of a hundred and twenty-five horse-power each which drive a dynamo installed in the center. The current is transmitted to the electric motors, actuating each of the wheels of the power car and the trailers. The General Electric Company has perfected a similar car for use on the suburban branches of street railroads in this country. Most of them are equipped with a two hundred horse-power gasoline engine directly connected to a dynamo from which power is generated and transmitted to the motors, which are located on the car axles. ”

“ No single all-powerful executive had been given the job of deciding things. Instead, General Motors’ customers made all the decisions. The financial statements of the several divisions were good barometers of the effectiveness of their management. The customer was always right.
Now, the admiral continued, with each G.M. division held responsible [Pg 68] for its own performance, common sense dictated that its officers must have full authority over the tools and materials required to discharge that responsibility. Control of purchasing was one of the first requirements. ”

“ Most of the leading engine works in Europe have taken up the construction of the Diesel motor in all sizes. A large number of middle-sized ships and various municipal power plants are already driven by it. In the United States a powerful company has just been organized for the purpose of constructing these motors, and the General Petroleum Company in California is going to erect a plant in San Franciso for the construction of motor ships for the coastwise trade, which, of course, will force the owners of steamers to follow. ”

“ These companies are running circles around their American counterparts. Ford is only making 20,000 Escape Hybrids this year, and GM's brand won't be on the market until 2007. This isn't just costing us energy efficiency - it's decimating American businesses and costing American workers their jobs.
There is now no doubt that fuel-efficient cars represent the future of the auto industry. These cars will be built and bought and mass quantities. ”

“ Real expansion of the home industry came with the Heavy Motor-car Order of 1904, although even then no great degree of progress followed immediately thereon. Traders generally were reluctant to acquire commercial motors for themselves until the success of the new vehicles had been assured, and some early failures, due to faulty construction, gave commercial motors a bad name at the start. With the adoption of improved methods, their utility was fully established, and the expansion of the industry during the last four or five years has been remarkable in the extreme. ”

“ The expert will judge of the condition of a motor by the wear that has occurred in the bearings rather than by any exhibition of temporary power that it may develop in a short test, and it is for this reason that the "general public" runs a risk whenever it buys a second-hand car that has not been thoroughly overhauled by a reputable factory or inspected by a competent engineer. ”

“ General Motors shares allocable to the two companies or to their officers and directors, or to the officers and directors of du Pont, or to resident members of the families of the officers and directors of the several companies, were to be sterilized, voted by no one. Du Pont, Christiana, and Delaware were forbidden to acquire any additional General Motors stock. Du Pont and General Motors might not have any preferential or discriminatory trade relations or contracts with each other. ”

“ One plan proposed was a distribution of General Motors shares held by du Pont, most of them to be distributed pro rata over a 10-year period to du Pont stockholders; the rest were to be sold gradually over the same 10-year period. ”

“ Much enlargement or rebuilding of works is already proceeding, while manufacturers who have hitherto devoted their attention mainly or exclusively to pleasure motors are now adapting their plant, etc., to the making of commercial motors either instead or in addition. The demand for pleasure motors is limited; that for public service motors and motor-vehicles for traders is illimitable. ”

“ The responsibility as the actual "inventor" can probably be no more definitely placed. However, had it not been for two developments, neither of them immediately related to the motor car, we should never have had this efficient method of transportation. The real "fathers" of the automobile are Gottlieb Daimler, the German who made the first successful gasoline engine, and Charles Goodyear, the American who discovered the secret of vulcanized rubber. ”

“ As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our automakers to the brink. We should not, and will not, protect them from their own bad practices. But we are committed to the goal of a re-tooled, re-imagined auto industry that can compete and win. Millions of jobs depend on it. Scores of communities depend on it. And I believe the nation that invented the automobile cannot walk away from it.
None of this will come without cost, nor will it be easy. But this is America. We don’t do what’s easy. ”

“ For years, while foreign competitors were investing in more fuel-efficient technology for their vehicles, American automakers were spending their time investing in bigger, faster cars. And whenever an attempt was made to raise our fuel efficiency standards, the auto companies would lobby furiously against it, spending millions to prevent the very reform that could've saved their industry. Even as they've shed thousands of jobs and billions in profits over the last few years, they've continued to reward failure with lucrative bonuses for CEOs. ”

“ Now, I understand people’s anger and frustration at the situation our auto companies find themselves in today. I raised concerns about the health of our auto industry a year-and-a-half ago when I spoke to industry leaders in Detroit. I urged them to act quickly to adopt new technologies and a new business approach that would help them stay competitive in these changing times. And while they’ve failed to move quickly enough towards these goals, at this moment of great challenge for our economy, we cannot simply stand by and watch this industry collapse. ”

“ The taunt of unreliability once levelled—and with justice—at the motor-car, is fast losing its force, owing to the vast improvements in design and details which manufacturers have been stimulated to make. The motor-car industry has a great future before it, and the prizes therein are such as to tempt both inventor and engineer. Every week scores of patents are granted for devices which aim at the perfection of some part of a car, its tyres, its wheels, or its engines. ”

“ The auto companies must not squander this chance to reform bad management practices, and begin the long-term restructuring that is absolutely necessary to save this critical industry and the millions of American jobs that depend on it, while also creating the fuel-efficient cars of tomorrow. ”

“ But within the limits of such radius the substitution of commercial motors for horse-drawn vehicles is undergoing an expansion which seems to be restricted only by the extent of the motor-car manufacturers' powers of production, while already the use of so many commercial motors is accentuating certain changes in commercial conditions which—as it is one of the objects of the present work to show—have ever been powerfully influenced by the transport facilities of the day. ”

“ The keenest financial and commercial experts of the United States have learned to keep the motor car industry constantly under surveillance—not that they mistrust the manufacturers, but that they have found the industrial situation is so firmly linked to the dollars and cents program of the country’s economy that nothing may successfully act to deprecate the importance of the auto industry. ”