An observer of 1928 would have grounds for claiming that the ChryslerDodge consolidation gave the automobile industry a Big Four rather than a Big Three, because there was in existence another automotive combination which looked big, which had been in operation since 1921 with apparent success, and which had a variety of models on the market, including a lowpriced competitor of Ford and Chevrolet. This was Durant Motors, formed less than a month after Durant had been ousted from the presidency of General Motors. The company was first chartered in New York in midJanuary, 1921, with a capital of $7,000,000 subscribed by Durant and a group of 67 friends, and was then reorganized, in April as a Delaware corporation.
Durant's announced intention was to manufacture a four-cylinder car to be sold below $1,000. His first associates were F. W. Hohensee, who had been production manager for Chevrolet, and H. T. Strut, who had been Chevrolet's chief engineer. An emphasis on the low-priced car seemed clearly indicated, although, in view of the poor condition in which DuPont and Sloan found the Chevrolet company, there might have been some misgivings about the likelihood of the same personnel doing any better elsewhere.
Operations were supposed to begin in Durant's home town of Flint, but, while manufacturing facilities were being developed there, Durant was making other arrangements to get into production. In March, 1921, he bought the Goodyear plant in Long Island City for two million dollars and prepared to bring out the Durant Four in the fall. Two months later, he acquired what had been the Sheridan Motor Car Division of General Motors, located in Muncie, Indiana, and the Sheridan car became the Durant Six. In addition, a new plant was projected for Oakland, California.
These moves were just preliminaries. Durant still held to the multi-model philosophy which had led to the founding of General Motors, and apparently had not intended the car that bore his name to be the entry in the low-priced field. This role was assigned to an automobile named the Star, which Durant introduced early in 1922. It was to sell for about $350, and the first full year's production was to be 200,000, as against 80,000 Durants. In practice, Durant never succeeded in making Stars for this price; they sold at the level of the Chevrolet rather than the Ford. They did, however, enjoy considerable popularity, some 1,500,000 being manufactured before Durant Motors went out of business.
Shortly after the announcement of the Star, Durant staged his coup of outbidding Chrysler and Studebaker for the Willys plant in Elizabeth and getting with it the designs that Chrysler's engineering trio had been working on, thereby adding another six-cylinder car, the Flint, to his line. He then reached into the luxury-car area by getting control of the Locomobile Company, just emerged from its unhappy involvement with Hare's Motors. Subsequently, Durant Motors offered two other models, the Princeton and the Eagle, but both were short-lived. There was also a truck manufacturer in the Durant structure, the Mason Truck, formerly Mason Motor Company, of Flint.
In addition, Durant managed to assemble a collection of parts-making subsidiaries. He selected the New Process Gear Company out of the wreckage of the Willys Corporation, buying it through the Warner Transmission Corporation of Muncie, Indiana, which he also controlled. Other supplier firms in Durant Motors were the American Plate Glass Company, whose acquisition meant that Fisher Body, Ford, and Durant together controlled a third of the country's plate glass production, the Adams Axle Company, and the Associated Bodies Corporation. Continental Motors supplied Durant with engines. Although it never was absorbed into the Durant organization, there was a point in the middle 20's when practically all of Continental's annual output of 300,000 engines was going to fill Durant orders.
Nor was this all. There was a Durant Motors of Canada, a Durant Motors Acceptance Corporation, which was not only to finance purchases but also to underwrite storage of cars during the winter by dealers so as to guarantee prompt spring delivery, and a bank, the Liberty Bank in New York. This last item, if unusual for an automobile company, was also ominous. Durant had begun with seven million dollars, and the breakneck expansion of Durant Motors in its first three years had certainly swallowed up all that plus whatever earnings the component companies had made. The incorporation of the bank was clearly an attempt to improve Durant Motors' cash position.
The basic trouble was that Durant had nothing to offer but a name, and while it was a name with some glamor in automobile circles, it was not one to arouse enthusiasm in the money markets. The man who had twice run General Motors into a financial crisis and had been jettisoned by the DuPonts was hardly a good risk. And even if a careful investor was willing to overlook the past record, a casual inspection of Durant Motors would show that it was predominantly an assortment of makeshift and castoffs.
By 1926, although the business boom was well on its way up, Durant's combination was beginning to come unstuck. In that year the properties in Flint were sold to General Motors, and in the following spring the Long Island City factory was disposed of to Ford. Durant's reaction was characteristic. Instead of reducing his operations to a scale commensurate with his resources, he announced grandiose plans for new mergers. There was to be a new combine called Consolidated Motors, which was to unite a group of unspecified independents around the Star "exactly as Buick in 1908 was used as the nucleus and keystone of General Motors. The companies in question were later rumored to be Hupp, Chandler, Peerless, Moon, Gardner, and Jordan.
But the automobile industry had changed too much in 20 years for Durant to be able to make history repeat itself. Nothing came of the proposed mergers; on the contrary, Durant Motors continued to shrink. The Locomobile Company stopped production early in 1929, and late in the summer it was announced that the Elizabeth plant was to be closed --this before the stock-market crash. (These closings left recently developed facilities in Lansing, Michigan, as the company's principal center of production.) Durant was also in trouble with stockholders who claimed that they had been induced to invest through misrepresentation, and he made a typically flamboyant effort to restore confidence by stating that for reasons of health he was turning the management of his affairs over to a group of executives who stood head and shoulders above any others in the automobile industry. This group turned out to be Frederick J. Haynes and several other Dodge executives who had been dislodged in the Chrysler-Dodge merger. They lasted a little over a year.
The crash of 1929 finished Durant Motors, although the final liquidation was delayed until 1933. Durant was not the man to concede defeat until he was knocked out. He tried to salvage his company by an arrangement with E. E. C. Mathis, a French automobile manufacturer, to make Mathis cars at Lansing, predicting with his usual incurable optimism that the day of the small car was at hand because of parking problems and cost of maintenance. It could be that he was right but merely premature. In any event, as the depression deepened, people were buying neither small nor large cars, and this time Durant was out. The fall of Durant Motors was his third strike.
That Durant had some of the qualities of greatness is beyond dispute. The Durant-Dort Carriage Company achieved its success because it made a better article more efficiently than its competitors. The Buick represented a contribution to the development of the automobile, and while Durant was not responsible for the contribution, he was the one with the foresight to realize the car's potentialities and the daring to gamble on it. His vision of a great automotive enterprise offering a car in each price range was perfectly sound. This was the concept that made both General Motors and the Chrysler Corporation, and to which Ford eventually had to come.
This much was constructive. But somewhere along the line "Billy" Durant became lost in a dream world of high-pressure promotion and paper values. He was not alone in this error during the 1920's, and it is much to Durant's credit that his fall was unaccompanied by the kind of scandal that attended the collapse of other paper empires of the period. He brought catastrophe to himself as well as his investors. At the age of 75, in fact, he had to file a petition in bankruptcy listing assets of $250 and liabilities of $914,000.
Yet he still was not finished. The year of his bankruptcy saw him open a supermarket in Asbury Park, New Jersey, which restored him briefly to the limelight because a newspaperman saw him helping to clean up the night before the opening and spread the story that the former master of General Motors was reduced to sweeping floors for a living. General Motors remembered its founder long enough to give him a place in the celebration of the production of the 25 millionth General Motors car in 1940. Subsequently his health failed and he was virtually a complete invalid when he died in 1947, the same year as Henry Ford. If Durant made big mistakes, he paid heavily for them. His epitaph can be given in the words of his onetime associate, Frederick L. Smith:
It would be a poorly posted analyst who failed to list W. C. Durant as the most picturesque, spectacular, and aggressive figure in the chronicles of American automobiledom. He certainly made some capital mistakes, a fact as to which we often violently disagreed, but the man who makes no mistakes rarely makes anything at all on a large scale.