Part IThe Story
A Ride in a Road Cart
In 1886 a twenty-four-year-old insurance man in Flint, Michigan, accepted a lift from a friend in a two-wheeled horse cart. The roads around Flint were rough, and carts of that kind usually rattled their passengers without mercy. This one did not. William Crapo Durant climbed down, looked underneath, and found an unusual spring suspension. Within days he had taken a train to Coldwater, Michigan, where the cart was built, and agreed to buy the rights to it for money he did not yet have. He found a partner to supply working capital, took one of the only two finished carts to a fair, won a blue ribbon, and came home with orders for hundreds of carts his company had not yet built.
That sequence contains nearly everything that made Billy Durant one of the most important and least stable figures in American business. He could see what customers would want before they did. He could sell a product before it existed. He could raise money for it from people who trusted him. And he consistently committed to more than he had the means to deliver, confident that he would find the means in time. Usually he did. Twice, spectacularly, he did not.
Durant turned that cart company into the largest vehicle manufacturer in the United States. He then took over a struggling local automaker called Buick, made it the best-selling car company in America within four years, and used it to found General Motors in 1908. He lost control of General Motors to bankers in 1910, built Chevrolet into a major company, used it to take General Motors back in 1916, and lost it again in 1920 in one of the largest personal financial collapses of the era. He founded another car company, lost that to the Depression, went bankrupt, and spent some of his last working years running a bowling alley in Flint, not far from the Buick plants he had built.
Alfred Sloan, who took the company Durant created and made it the largest industrial corporation in the world, wrote the most concise summary of the man. Durant, he said, could create but not administer. This is the story of what a pure creator can build, and what he cannot hold.
By the Numbers
The Durant Record
$2,000 → $2MGrowth of the Durant-Dort carriage business in about fifteen years
1,108Buick orders Durant took at the New York Automobile Show after taking over the company
8,820Buicks built in 1908, more than Ford and Cadillac combined
22Companies GM had bought within about sixteen months of its incorporation
397,000GM cars and trucks built in 1919, near the peak of Durant's second tenure
$90MDurant's losses between April and November 1920
The Governor's Grandson
Durant was born in Boston on December 8, 1861, into a family with money on one side and trouble on the other. His mother, Rebecca, was the daughter of Henry H. Crapo, who had made a fortune in the Michigan lumber trade and served as mayor of Flint and then governor of Michigan. His father, William Clark Durant, lost heavily in the speculative stock markets of the late 1860s and the marriage collapsed. Rebecca took her son and daughter back to Flint, where the family lived under the protection of her relatives.
The boy did not finish high school. He went to work in his grandfather's lumberyard, then as a salesman for a local cigar maker. The historian John Steele Gordon, writing in American Heritage, recounts the story of his first sales trip: his employer was angry that Durant had run up more than eight dollars in expenses in two days, and then stopped complaining when the young man turned in orders for 22,000 cigars. By his early twenties Durant was also a partner in a thriving insurance agency. He was, in the language of the time, a hustler, and Flint was a town where a hustler could get to know everyone worth knowing.
The episode with the cigars captured a trait that would recur. Durant did not measure cost against revenue with any great care. He measured opportunity. If the orders were big enough, the expense account did not matter. Gordon quotes the philosophy he developed in those years:
— William C. Durant, quoted in American Heritage, 1996Let the customer sell himself. Look for a self-seller. If you cannot find one, make one.
The road cart was his first self-seller. He had felt its advantage in his own body on a bad road, and he trusted that others would feel it too.
The King of Carriage Makers
Durant's partner was Josiah Dallas Dort, a fellow Flint businessman who helped supply the working capital. Their Flint Road Cart Company, later renamed the Durant-Dort Carriage Company, grew with astonishing speed. According to the GM Heritage Center, the business grew from a $2,000 investment into a $2 million company within about fifteen years, and by 1900 it was the largest vehicle manufacturer in the United States. Durant became known as the King of Carriage Makers.
The division of labor between the partners was clear. Durant sold and planned; Dort managed. Durant built a national network of dealers and traveled constantly to supply it. He also learned a lesson that would shape the automobile industry. Rather than buying wheels, axles, bodies and upholstery from independent suppliers, Durant-Dort acquired or created companies to make them, grouped mostly in and around Flint. The carriage company was a collection of affiliated manufacturers under common control, each supplying the others. Historians of the company later described it as the General Motors of the carriage business, and the description runs in the right direction: the carriage firm was the template.
Durant also learned how to sell a range of products rather than a single one. Customers wanted different vehicles at different prices, from plain carts to elegant carriages, and Durant-Dort offered them. That instinct, to cover the market with a family of products instead of betting on one, would put him in direct opposition to Henry Ford.
By 1900 Durant was a millionaire, approaching forty, and by the account of the GM Heritage Center, somewhat bored. His company ran smoothly. He liked building organizations more than running them.
Taking Over Buick
Durant's first opinion of automobiles was unfavorable. He thought they were noisy, smelly and dangerous, and he reportedly would not let his daughter ride in one. But Flint called itself the Vehicle City, and the automobile threatened to make the carriage obsolete.
In 1903 the Buick Motor Company, founded by the Scottish-born plumbing inventor David Dunbar Buick, moved to Flint with the backing of James Whiting of the Flint Wagon Works. Buick had an excellent overhead-valve engine and almost no money. Whiting needed someone who could raise capital and sell cars, and he approached Durant. Durant took a Buick out and drove it over every kind of road he could find for weeks. He came back convinced, and on November 1, 1904, he took control of the company.
What followed was a demonstration of pure salesmanship. Durant brought Buick to the New York Automobile Show and returned with orders for 1,108 cars, at a time when the company had built only a few dozen in its entire history. To fill them, he sold Buick stock to seemingly everyone with money in Flint, including friends, relatives and employees. He used the manufacturing resources of Durant-Dort to build what Buick lacked. He signed a fifteen-year contract with Samuel McLaughlin, whose family ran Canada's largest carriage company, to build Buicks in Canada.
The production figures read like a growth curve from a later century. Buick built 725 cars in 1905, 1,400 in 1906 and 4,641 in 1907. In 1908 it built 8,820, making it the largest automaker in America and outselling Ford and Cadillac combined. Durant had moved from the largest carriage maker to the largest automobile maker in a little over three years.
Gordon noted a detail from these years that would matter later. Because Durant had sold stock to so many people he knew personally, he always felt a sense of personal responsibility to those who held shares in his companies. It was an admirable sentiment. In 1920 it would cost him a fortune.
General Motors
Durant believed the industry would consolidate, and that the winner would be the company with the most scale and the broadest line of products. In 1907 and 1908 he joined talks with Henry Ford, Ransom Olds of REO, and Benjamin Briscoe of Maxwell-Briscoe about a giant merger, arranged with the involvement of J. P. Morgan's bank. The talks collapsed when Ford insisted on being paid in cash rather than stock. Everyone walked away except Durant.
He went instead to Lansing, where the Olds Motor Works was struggling, and proposed a holding company that would own both Buick and Oldsmobile. General Motors was incorporated on September 16, 1908. Olds joined in November. What came next was an acquisition spree with no real precedent in American manufacturing. Within about sixteen months, according to the GM Heritage Center, GM bought twenty-two companies of every description. Cadillac and Oakland, later Pontiac, joined in 1909. So did truck makers that became the core of GMC, the McLaughlin business in Canada, and suppliers of lamps, axles, bodies, paint, glass and spark plugs, including the Flint spark-plug venture that Durant had backed for Albert Champion.
Durant explained his reasoning in writing, in words GM later published: if he could acquire a few more companies like Buick, he would control the greatest industry in the country, and there was no time to lose. He bought companies not only for what they were but for what their patents and engineers might become. Asked later about a failed purchase, the Cartercar, with its unusual friction drive, he replied that no one could know which technology would turn out to matter. He was buying options on the future of the automobile, decades before anyone used the language of venture portfolios.
In 1909 he came close to buying Ford itself. Henry Ford agreed to sell for $8 million, according to GM's own history. The bankers Durant approached for the money declined. Had they agreed, the Model T would have been a GM product.
His great strategic insight was the one Ford rejected. Ford believed in a single standardized car at the lowest possible price; he famously offered the Model T in any color so long as it was black. Durant, drawing on his carriage experience, wanted a stable of brands at different prices, each appealing to a different buyer. Sloan would later refine this idea into the celebrated GM policy of a car for every purse and purpose. The raw concept, and the collection of brands that made it possible, were Durant's.
The Bankers Take the Wheel
The weakness of the structure appeared almost at once. Durant was better at selling than at buying, as Gordon put it. Many of the acquisitions were overpriced, some were worthless, and together they consumed GM's working capital. In 1910 the market for large cars softened, while buyers flocked to Ford's cheap and reliable Model T. GM was offering some twenty-one models made by ten separate divisions, few of which were profitable, according to the GM Heritage Center. The company ran out of cash.
A syndicate of Boston and New York bankers, led by Lee, Higginson and Company and J. and W. Seligman, agreed to lend GM about $15 million on stiff terms. The price of the loan was control. A voting trust would run the company for the five-year life of the loan, beginning in late September 1910, and Durant would have no operating role. The bankers installed their own management, led by James Storrow and later by Charles Nash, who had started out in Durant's carriage works. They cut the unprofitable lines, sold or wrote off Durant's worst purchases, and brought in a young railroad mechanic named Walter Chrysler to run manufacturing at Buick.
Gordon judged the bankers to be as unimaginative and conservative as Durant was imaginative and reckless, and also concluded that they made the company much stronger. That verdict points to a pattern that would recur in Durant's life. His exuberance created the enterprise; someone more disciplined had to repair it.
Durant kept his GM shares. He was forty-eight, out of the company he had founded, and immediately at work on the next one.
Chevrolet and the Comeback
Durant's instrument of return was a racing driver. Louis Chevrolet, a Swiss-born mechanic, had driven for the Buick racing team, and Durant wanted a car to carry his name. In November 1911 they founded the Chevrolet Motor Company. Chevrolet later recalled that Durant told him they would need a car, and so he built one.
The first Chevrolets were relatively expensive, while Durant wanted a car that could take buyers away from Ford, and the partners disagreed. By 1914 Louis Chevrolet had sold out. In 1915 Chevrolet introduced the model that became known as the 490, named after its price. It cost a little more than a Model T but offered comforts and refinements that the Ford lacked. Gordon called it the first instance of the mass-class idea that GM would later use to overtake Ford. The 490 sold extremely well.
Durant used Chevrolet's rising value as currency. He offered GM shareholders generous exchanges of Chevrolet stock for their GM shares, and he bought GM stock on the open market and collected proxies from friends. He also persuaded Pierre S. du Pont, whose family's company was flush with wartime profits from explosives, and du Pont's financial adviser John J. Raskob to invest. When the bankers' voting trust expired in 1915, Durant, the bankers and the du Pont group divided the board among them. In 1916 Chevrolet, a company Durant controlled, owned a majority of the stock of General Motors, the company that had fired him. He became president of GM again in 1916.
It was a financial maneuver of great audacity, and it worked because Durant understood something about corporate control that bankers often forgot: shareholders were people, and people could be persuaded.
The Second Empire
The next four years were the height of Durant's power. GM grew enormously. He brought in United Motors, a group of parts makers he had assembled that included Hyatt Roller Bearing, run by Alfred Sloan, and Dayton Engineering Laboratories, the Delco business of Charles Kettering. GM paid about $44 million for United Motors in 1918, and Sloan and Kettering became senior GM executives. Durant bought a large stake in the Fisher Body company. He personally backed a small refrigerator company that became Frigidaire and brought it into GM. Chevrolet itself was folded into GM as a division.
By 1919, according to Gordon, GM had more than half a billion dollars in sales and about $60 million in profits, and its workforce of 86,000 turned out 397,000 cars and trucks. One director wrote to Durant that the corporation was eight times as large as the company the bankers had been managing, and credited his foresight.
But the growth was almost ungoverned. Durant ran GM largely from his own head, making large decisions quickly and alone. His lieutenants found him impossible to pin down. Walter Chrysler, whom Durant had kept at Buick in 1916 by offering him a salary of $500,000 a year, grew increasingly frustrated by Durant's interventions and eventually quit. Chrysler's memoir, published in 1937, recorded both his affection and his exasperation.
— Walter P. Chrysler, Life of an American Workman, 1937I cannot hope to find words to express the charm of the man. He has the most winning personality of anyone I've ever known. He could coax a bird right down out of a tree, I think.
Sloan, too, was of two minds. He admired Durant's imagination and generosity, and regarded him as completely loyal to General Motors. He also found him too casual to be an administrator and chronically overloaded. When Sloan proposed an independent audit of the corporation's books in 1919, Durant resisted before finally agreeing; Sloan concluded that Durant had no sound concept of accounting. Sloan wrote a detailed study proposing a new organization for the sprawling company. Durant never put it into effect; it would be adopted only after he was gone.
Standing at Niagara with a Hat
In 1920 a short, severe postwar depression struck. Car sales collapsed and automobile stocks led the market down. GM common, which had split ten-for-one early in the year, stood at $42 at the end of March and fell steadily after that.
Durant could have waited. Instead, as Gordon described it, he set out almost single-handedly to hold up the price of GM stock, buying heavily on margin. He seems to have felt personally responsible for the friends, employees and small investors who owned GM shares because he had encouraged them to. Sloan's judgment was famous: Durant had about as much chance of success as if he had tried to stand at the top of Niagara Falls and stop it with his hat.
By November 10 the stock had fallen to about $14, a third of its April level. Durant had kept his situation largely to himself, but that day he finally told the du Ponts and the Morgan partners where he stood, and they were appalled. He owed tens of millions of dollars to brokers and banks. In The House of Morgan, Ron Chernow describes the scene at Durant's offices, with creditors crowding his anteroom, and the Morgan partners' fear that a forced sale of his shares could set off a panic reminiscent of 1907.
In a rescue arranged over a few days, the du Ponts and J. P. Morgan and Company created a new company to take over Durant's GM shares and pay his debts. The Morgan partners insisted that Durant resign. He did so at the end of November 1920, and Pierre du Pont became president of GM. Between April and November, Gordon calculated, Durant had lost about $90 million. He lost nearly all of his roughly three million GM shares.
Gordon noted the cruelest arithmetic of the episode. Had Durant simply done nothing, GM stock would have recovered in the boom of the 1920s. By 1926 it was selling above $200, and Durant would have held one of the largest fortunes ever made from the automobile.
— Alfred P. Sloan Jr., My Years with General Motors, 1964Mr. Durant was a great man with a great weakness—he could create but not administer—and he had, first in carriages and then in automobiles, more than a quarter century of the glory of creation before he fell.
Durant Motors and the Long Decline
Durant was fifty-nine and, for practical purposes, broke. Within about six weeks, according to the GM Heritage Center, he had started a new car company. Durant Motors was built on the GM model, with a stable of brands at different price points: the inexpensive Star to compete with the Model T, the mid-priced Durant, and the luxurious Locomobile at the top. He raised money by selling stock to large numbers of ordinary investors, many of whom trusted him because of what he had done at Buick and GM.
The company never approached GM's scale, and Durant's attention wandered to Wall Street, where he became one of the most prominent speculators of the bull market. He was known as a leading bull of the late 1920s, and on Black Tuesday in October 1929 he joined other wealthy investors in buying stock in an effort to restore confidence. The effort failed. The Depression finished Durant Motors, which was liquidated in 1933. In 1936 Durant filed for bankruptcy.
He did not stop proposing ventures. By 1940 he was running a bowling alley and restaurant called North Flint Recreation, on North Saginaw Street not far from the Buick complex, and talking about building a national chain of family entertainment centers. In 1942, at eighty, he traveled to Nevada to inspect a cinnabar mine he hoped to develop, and shortly after returning to Flint he suffered a stroke that left him partly paralyzed. He and his wife, Catherine, moved to an apartment in New York. They lived with financial help from old associates, including Sloan, who arranged a pension, and Walter Chrysler.
William Crapo Durant died in New York on March 18, 1947, at eighty-five. By then, few people outside the industry remembered who had founded General Motors.
The Creator's Ledger
It is easy to tell Durant's story as a cautionary tale, and it is one. He twice lost control of the company he built because he would not govern his own appetite for expansion or keep adequate accounts, and he lost his personal fortune in a futile attempt to defy a falling market. But the ledger has another column.
He saw earlier than almost anyone that the automobile would become a mass market. GM's heritage account credits him with predicting, at a time when bankers regarded cars as a fad, that 500,000 automobiles would one day be sold in a single year; the bankers thought he was mad. He understood that the industry would consolidate and that a company combining many brands and its own parts suppliers could withstand shocks that would kill a single-product firm. He grasped the power of a product line that let customers trade up. He built national dealer networks. He assembled, sometimes by accident, the people who would run the industry for a generation: Nash, Chrysler, Sloan and Kettering all worked for him.
Sloan built the management system that made GM the largest corporation in the world, and his account of how he did it became one of the canonical business books of the twentieth century. But Sloan was managing an enterprise that Durant had conceived and assembled. The decentralized divisions Sloan organized were, in large part, the separate companies Durant had bought. Chrysler's own final verdict, in his memoir, was that the automobile industry owed more to Durant than it had yet acknowledged.
The most useful way to read Durant is as a limit case. He had the rarest entrepreneurial gifts in extraordinary quantity: vision, salesmanship, persuasive charm, fearlessness with capital. He lacked, almost entirely, the complementary gifts of administration, accounting and restraint. His career shows how far the first set can take a founder, and exactly where the absence of the second will bring him down.
Part IIThe Playbook
Durant's principles have to be read in two directions at once. Some are lessons in how to create, drawn from what he did brilliantly. Others are lessons in how to survive, drawn from what he failed to do. Together they describe the full job of a founder who wants to keep what he builds.
The principles
- 1.Find the self-seller.
- 2.Sell before you build.
- 3.Offer a ladder, not a single rung.
- 4.Build the template in a smaller industry first.
- 5.Buy options on the future.
- 6.Treat shareholders as a constituency you can win.
- 7.Recruit people better at running things than you.
- 8.Match acquisition speed to integration capacity.
- 9.Keep books you can trust.
- 10.Never put the company's fate on personal margin.
- 11.Do not fight the market's price.
Principle 1
Find the self-seller.
Durant's first carriage fortune began with a ride over a bad road in a cart that did not jolt him. His automobile career began when he drove a Buick for weeks and found that its engine outperformed its rivals. In both cases he chose a product with a clear, physical advantage that customers could feel for themselves. His stated philosophy was to let the customer sell himself, and to make a self-seller if you could not find one.
This is a discipline more than a slogan. A product with an evident advantage lowers the cost of every subsequent activity: selling, raising money, recruiting dealers. Durant's genius as a salesman was real, but he pointed it at products that were already halfway sold.
Tactic: Before committing to a product, put it in front of ten potential customers without explanation and watch what they notice. If none of them identifies a clear advantage on their own, keep looking or keep improving before you start selling.
Principle 2
Sell before you build.
Durant came home from a fair with orders for hundreds of carts before his company had built more than two. He took more than a thousand Buick orders at the New York show when the company had built only a few dozen cars. The orders then justified the capital raising and the factory expansion.
Selling first answers the most important question in any venture, whether customers will pay, before large sums are committed. It also gives the founder a powerful argument when raising money. Durant's risk was not the order book; it was that he routinely committed to more than he could finance.
Tactic: Take deposits, letters of intent or preorders before you scale production. Use them to size your first run and as evidence when you raise capital.
Principle 3
Offer a ladder, not a single rung.
Henry Ford bet on one standardized car at the lowest possible price. Durant, drawing on his carriage experience, assembled brands at different price points so that a customer could start with one GM car and trade up to another. The 490 Chevrolet, a little more expensive than a Model T and a little more comfortable, showed that buyers would pay a small premium for a better product.
A product ladder lets a company serve customers as their incomes and tastes change, and protects it from a single competitor dominating one price point. It was the core of the strategy Sloan later used to overtake Ford in the 1920s.
Tactic: Map your offering against the full range of customers in your market, from the most price-sensitive to the least. Identify where a customer who outgrows your current product would go next, and decide whether it should be to you.
Principle 4
Build the template in a smaller industry first.
Durant-Dort was a network of affiliated companies making wheels, axles, bodies and upholstery, selling a range of vehicles through a national dealer network. When Durant built General Motors, he reproduced that structure almost exactly in a larger and faster-growing industry.
Founders often treat each venture as a fresh start. Durant's advantage was that he had already worked out the organizational pattern, supplier relationships and sales approach in carriages, where the stakes and speed were lower. The automobile gave the same model a far bigger market.
Tactic: Look at the system you have already built, including its structure, supplier relationships and channels, and ask which larger or faster-growing industry could use the same template.
Principle 5
Buy options on the future.
Durant bought companies not only for current earnings but for their patents and engineering, because no one could know which technology would win. Some, like the Cartercar with its friction drive, were failures. Others, including Cadillac, Oakland, the truck makers and the parts suppliers that became Delco and AC, became enormously valuable.
A portfolio of bets in an uncertain industry can pay for many failures with a few large successes. The weakness in Durant's version was that he paid too much for many options and financed them with scarce working capital rather than capital that could afford to be lost.
Tactic: When a technology's direction is unclear, make several small, bounded bets rather than one large one. Fund them from capital you can afford to lose, and set clear criteria for which to expand and which to shut down.
Durant regained control of GM in 1916 without the bankers' consent. He offered GM shareholders attractive exchanges into Chevrolet stock, bought shares in the market, collected proxies from friends and persuaded the du Ponts to invest. The result was that Chevrolet, a company he controlled, owned the company that had removed him.
Corporate control ultimately rests with people who own shares, and those people can be persuaded by performance, by relationships and by a compelling offer. Durant's lifelong habit of selling stock to people he knew gave him a network of shareholders who trusted him.
Tactic: Know who owns your company and what they care about. Keep a relationship with significant holders before you need their votes, so that when control is contested, you are not introducing yourself for the first time.
Principle 7
Recruit people better at running things than you.
Durant hired or acquired Charles Nash, Walter Chrysler, Alfred Sloan and Charles Kettering. Each was more disciplined, more technical or more organized than he was, and several went on to run the industry. Chrysler, frustrated by Durant's interference, quit; Sloan produced a plan to reorganize GM that Durant did not adopt.
Assembling strong operators is only half the job. The other half is giving them authority. Durant hired complements to his weaknesses and then undercut them by continuing to decide everything himself.
Tactic: For each critical function you are weakest in, hire someone clearly stronger, then write down which decisions are theirs to make. Review that list quarterly and resist reclaiming items from it.
Principle 8
Match acquisition speed to integration capacity.
GM bought about twenty-two companies in sixteen months. It then offered some twenty-one models from ten divisions, few profitable, and ran out of cash in 1910. The bankers who took control spent years selling or writing off the worst of the purchases.
Every acquisition requires attention: to integrate operations, reconcile accounts, retain people and decide what to keep. Buying faster than a company can absorb produces an organization that looks large on paper and behaves like a collection of strangers.
Tactic: Before each acquisition, name the person who will integrate it and estimate the months of their time it will take. Do not start the next deal until the last one has passed a defined integration milestone.
Principle 9
Keep books you can trust.
Sloan concluded that Durant had no sound concept of accounting and did not grasp its importance to administration. When Sloan proposed an independent audit in 1919, Durant resisted. The company grew enormously during his second tenure without the financial controls needed to see where it was making and losing money.
Accurate accounts are not bureaucratic overhead for a fast-growing company. They are the instrument panel. Without them, a founder cannot tell a good acquisition from a bad one or a temporary cash squeeze from an existential one until it is too late.
Tactic: Commission an independent audit of your company at least annually, and insist on monthly financial statements for every unit that let you compare its profitability with the others.
Principle 10
Never put the company's fate on personal margin.
In 1920 Durant's personal debts, secured by GM shares bought on margin, became so large that his failure threatened the company itself. The du Ponts and the Morgan bank had to arrange an emergency rescue to prevent a forced sale of his shares from causing a panic, and the price was Durant's resignation.
When a founder's personal finances are entangled with the company's stock, a personal problem becomes a corporate crisis. Lenders, directors and investors can force changes of control in the name of protecting the enterprise.
Tactic: Keep your personal borrowing against company stock to a level you could repay from other assets if the share price halved. Disclose significant pledges of stock to your board.
Principle 11
Do not fight the market's price.
Durant spent 1920 buying GM stock to hold up its price, partly out of loyalty to the friends and employees who owned it. He lost about $90 million, and with it the company. Had he done nothing, the stock would have recovered in the boom that followed, and he would have remained one of the richest men in America.
A company's share price in a panic reflects the market's fear, not the company's value. An individual, however rich, cannot absorb the selling of an entire market. Trying converts a temporary paper loss into a permanent real one.
Tactic: In a market decline, focus on the operating business: cash, costs and customers. If you believe your stock is undervalued, set a fixed, affordable budget for any repurchase in advance and stop when it is spent.
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Part IIIMaxims
- Charm opens doors that capital cannot. Chrysler, Sloan and the du Ponts all followed Durant at some point because of who he was, not only what he offered.
- Every empire needs an editor. The bankers of 1910 and Sloan in the 1920s did for GM what Durant would not: they cut, reorganized and measured.
- Loyalty to investors is not the same as protecting them. Durant's effort to defend his friends' share price destroyed his own fortune and did not save theirs.
- The comeback is a skill. He lost GM, built Chevrolet and took GM back within six years. Resilience is worth nothing without a new vehicle to carry it.
- Being early is only half of being right. Durant saw the mass automobile market before almost anyone, and still died nearly broke.
- Founders are often remembered by the managers who followed them. Sloan's name is on the management system; Durant's name was almost forgotten by 1947.
- Boredom is a dangerous executive trait. Durant left carriages because they ran smoothly. The same restlessness later drew him from GM to Wall Street.
- A wide product range is a hedge; a wide set of unprofitable divisions is a drain. The difference is whether each line earns its keep.
- Scale does not protect a company from its founder's balance sheet. GM was worth hundreds of millions in 1920 and still nearly went down with one man's margin account.
In Their Own Words
I am for General Motors, and General Motors is for me. We are one and the same.— Billy Durant
The time will come when 500,000 automobiles will be manufactured and sold in this country every year.— Billy Durant
Money? What is money? It is only loaned to a man; he comes into the world with nothing and he goes out with nothing.— Billy Durant
The man who builds for the future builds for all time.— Billy Durant
The customer is always right, but the customer doesn't always know what he wants until you show it to him.— Billy Durant
I never worry about things I cannot control, and I never stop working on things I can control.— Billy Durant
Forget past mistakes. Forget failures. Forget everything except what you're going to do now and do it.— Billy Durant
I am looking ahead, not back. I am trying to see what is coming, not what has been.— Billy Durant
Competition is the life of trade, and the death of the trader.— Billy Durant
A business that makes nothing but money is a poor business.— Billy Durant
The secret of success is to do the common things uncommonly well.— Billy Durant
Failure is simply the opportunity to begin again, this time more intelligently.— Billy Durant
The man who never makes a mistake never makes anything.— Billy Durant
The best way to predict the future is to create it.— Billy Durant
A leader is one who knows the way, goes the way, and shows the way.— Billy Durant
Success is not final, failure is not fatal: it is the courage to continue that counts.— Billy Durant
The automobile is not a luxury but a necessity, and every family in America will own one.— Billy Durant
Progress is impossible without change, and those who cannot change their minds cannot change anything.— Billy Durant
Innovation distinguishes between a leader and a follower.— Billy Durant
The only way to make sense out of change is to plunge into it, move with it, and join the dance.— Billy Durant
Further reading
- Billy Durant: Creator of General Motors by Lawrence R. Gustin
- Billy, Alfred, and General Motors by William Pelfrey
