SNATCHING DEFEAT FROM THE JAWS OF VICTORY

SNATCHING DEFEAT FROM THE JAWS OF VICTORY

There are numerous keys to success in business with intelligence, instinct, timing, and perseverance topping the list. However, there is another that is, perhaps, even more important – the ability to recognize the pinnacle of success thus avoiding the long fall on the other side.
David Buick had the former but lacked the latter. When the Alex Manufacturing Company of Detroit went bankrupt in 1882, the shop supervisor, Buick, sensed opportunity. With a partner, William Sherwood, David Buick took control of the company reorganized it as Buick & Sherwood and soon a record number of cast iron toilet bowls were rolling from the factory.
His intelligence ensured the success of the company. Between 1881 and 1889, Buick received thirteen patents on a variety of plumbing related items including valves and even a lawn sprinkler. However, his crowning achievement was the development of a revolutionary process to affix porcelain to cast iron thus creating the cast iron bathtub.
The timing was perfect for his venture. Beginning in about 1890 a rapid urbanization of America began in earnest and with it came an explosion of indoor plumbing.
Though profits were climbing with the passing of each year Buick became convinced that greater fortunes awaited in the fledging automotive industry. In 1899, he convinced Sherwood to sell the company and then used his share of that sale to form Buick Auto-Vim & Power Company for the production of gasoline engines.
Within two years, the company had begun to show a shadow of a profit. With these profits and a highly advanced valve in head engine, he reorganized the company as the Buick Manufacturing Company in 1902.
The engine generated interest as well as orders. However, production delays and Buick’s insistence on refining the vehicle had nearly exhausted all financial reserves and assets of the company by the late summer of 1903.
Only one creditor offered what appeared to be a way out, Benjamin Briscoe the sheet metal tycoon of Detroit. In a complex stock transaction Buick signed over eighty percent of the company to Briscoe with the stipulation that once his debt was paid the company would be returned to his control. Until that time, Briscoe would make no effort to collect on the outstanding debt.
The marriage of convenience was short lived and in the fall of 1903 Briscoe found a way to recoup losses by selling his share of Buick with the same restrictions and stipulations to the owners of Flint Wagon Works who were chomping at the bit to get involved with automobile production. David Buick essentially was now an indentured servant to the company that bore his name.
For the Flint Wagon Works it soon became apparent that an automobile manufacturing company was an expensive proposition so Buick, the company, with Buick, the man, in tow was sold to William Durant of Durant & Dort, the second largest manufacturer of wagons and carriages in the country. Buick was given a token position as company secretary, one share of stock and a seat on the board of directors.
Within sixty days of assuming the helm, Durant had raised the capital stock of Buick from $75,000 to $1.5 million. Almost as rapidly Durant established a state of the art manufacturing center and initiated a franchise system for the extensive dealer network that had been marketing his carriages. Before Durant assumed control of the company, less than fifty Buicks had been built. By the end of 1906, two years after the acquisition by Durant, more than 2,000 cars had been sold and the company was building 250 a week.
David Buick, in 1908, left the company and his trademarked name with a mere $100,000, the same amount that he had sold his plumbing business for in 1899. The money did not last him long; another automotive company, a carburetor manufacturing company, Florida real estate, and dry oil wells left him broke in just five years. When he died in March of 1929, he was employed at the information desk of the Detroit School of Trades and his assets consisted of two suits, one pair of shoes, and a box of pictures.
Durant’s fall was even more tragic as his was from even greater heights. On September 1, 1908, he used Buick assets to form a new company – General Motors. Two months later, he bought the Olds Motor Works. In rapid succession, he added Oakland and Cadillac.
By the end of 1913, he had added 13 different automobile companies and almost a dozen auto parts companies to the GM stable. He had also overextended the company to such a point he needed more than $12 million to stay solvent. The banks that had financed his ventures panicked and agreed to rescue GM only if Durant would step aside.
The next seventeen years were a blur of Durant activities. He partnered with a Swiss born race car driver named Louis Chevrolet, formed a new automotive company, regained control of GM, lost control of GM and formed a smaller version of GM named Durant.
In 1933, Durant filed for bankruptcy listing $914,000 in debts and $250 worth of assets that included his clothes. Less than a year later a reporter located Durant, he was washing dishes and sweeping floors in a food market with corner hamburger restaurant in a converted former Durant showroom. Durant had leased the building and lived in an apartment above. Shortly before his death in 1944, he had expanded his holdings – he added a bowling alley to building.
photo courtesy of General Motors – click to enlarge

DAWN OF THE PONTIAC

DAWN OF THE PONTIAC

Henry Ford, Horace Dodge, Louis Chevrolet, and Ransom E. Olds are just a few of the men who have obtained a dubious form of immortality because of their association with the American automobile industry. For some legendary individuals such as LaSalle, Lincoln, and DeSoto, this honor was dubious indeed, as the use of their names as tools of marketing was akin to using the name of General George Washington to sell toilet paper even though these were fine automobiles.
Sadly, crass marketing is no respecter of persons and though the cars that bore his name have become legendary, the introduction of these vehicles and much of their early promotion were truly tasteless. Perhaps an even greater tragedy is that in today’s society where being able to differentiate between Homer Simpson and Ronald Reagan or identifying the correct century in which World War II was fought constitutes a knowledge of American history the name sake for these fine automobiles is as unrecognized as the middle name of Zachary Taylor’s vice president.
Chief Pontiac of the Ottawa tribe was a brilliant tactician, politician, and strategist. His skills as an orator enabled him to form the most powerful coalition in Native American history that in turn led to Pontiac’s Rebellion; a brilliantly fought, though short lived series of skirmishes in 1763, 1764 and 1765. No homage to the man or any of these grand accomplishments was evident at the premier of the automobile that bore his name in January of 1926.
The automotive chapter of the Pontiac name begins in early 1906 with a meeting between Edward Murphy, who wanted to move his Pontiac Buggy Company, maker of Oakland carriages and wagons, into the modern era, and Alanson Brush, who had made a name for himself with his design work on early Cadillac models. A subsequent series of meetings resulted in the formation of the Oakland Motor Car Company in the summer of 1907.
The partnership was a short one and by January of 1908 when the new Oakland made its official debut, Brush had moved onto other projects. The fledgling company had just begun to rise above lackluster sales when in September of 1909 it was dealt another blow, the death of forty four year old Edward Murphy.
Shortly before his death, arrangement had been made to merge the company with one recently founded by another buggy man, William Durant. This fortuitous folding of Oakland into General Motors ensured the companies survival.
In the years that followed, sales of Oakland’s were consistent, largely the result of timely marketing built around success in a variety of motor sports and innovation such as the introduction of an optional V8 engine in 1915. However, in the recessionary years of the post war period and with the restructuring of General Motors in the early 1920’s the Oakland star began to wane.
By the mid 1920’s the hard times were rapidly becoming a fading memory and General Motors, in an effort to maximize profits, began expanding their product line by introducing companion lines for most of their vehicles, even companion models. Oldsmobile had the Viking, Buick the Marquette, Cadillac the LaSalle and Oakland the Pontiac.
General Motor envisioned great things for the Oakland/Pontiac team and as a result, all stops were pulled in the debut and initial promotion to dealers of the new Pontiac. In conjunction with the New York Auto Show where the car was first shown the Commodore Hotel was booked for an unprecedented sales meeting for dealers as well as their sales staff.
For this event, the hotel was rechristened as the “Wigwam,” promotional material referred to the main conference as the “Pow Wow” and the dinner as “Heap Big Eats.” Promotional items and sales programs that ensured dealers made plenty of “wampum” were distributed.
It might have been tasteless. It might have been a dishonor to Pontiac as well as Native Americans but it worked. First year sales, 76,696 units, shattered all industry records and by the summer of 1929 an astounding 500,000 Pontiacs had been sold.
Ironically, the success of Pontiac came at the threshold of the Great Depression, a time when automobile manufactures were tightening the belt. At General Motors, this meant a reversal of many policies initiated during the heady times of the mid 1920’s.
As a result, the Oakland was not to be found in the 1931 lineup and the assets of that division were used to revamp the Pontiac. As an historical footnote the 1932 Pontiac was truly a bargain and technological wonder with a highly advanced V8 being available in convertibles for a sales price of just $945.
In the years that followed the Pontiac enjoyed steady sales through a large base of staunch brand loyalty. Moreover, for each subsequent generation a specific Pontiac would symbolize that era – the Silver Streak, the Bonneville, the GTO, Firebird, and Trans Am. As a result Pontiac is an American legend that, perhaps, is worthy of its namesake.