May 2

This Day in History

Automotive

May 2, 1918:

GM buys Chevrolet

On this day in 1918, General Motors Corporation (GM), which will become the world's largest automotive firm, acquires Chevrolet Motor Company.

GM had been founded a decade earlier by William C. "Billy" Durant, a former carriage maker from Flint, Michigan, whose Durant-Dort Carriage Company had taken control of the ailing Buick Motor Company. On September 16, 1908, Durant incorporated Buick into a new entity, General Motors, which by the end of that decade had welcomed other leading auto manufacturers--including Oldsmobile, Cadillac and Oakland--into its fold. In 1910, with GM struggling financially, stockholders blamed Durant's aggressive expansionism and forced him out of the company he founded. In November 1911, he launched Chevrolet Motor Company, named for his partner, the Swiss race car driver Louis Chevrolet.

Still the owner of a considerable portion of GM stock, Durant began to purchase more shares in the company as his profits from Chevrolet allowed. In a final move to regain control, Durant offered GM stockholders five shares of Chevrolet stock for every one share of GM stock. Though GM stock prices were exorbitantly high, the market interest in Chevrolet made the five-for-one trade irresistible to GM shareholders. With the sale, concluded on May 2, 1918, Durant regained control of GM. Just two years later, however, he was pushed out for good by Pierre S. DuPont, whose family's powerful chemical company had begun investing in the fledgling auto industry by buying GM stock in 1914. Pierre DuPont subsequently rose to the chairmanship of GM's board and became president in 1920. In an agreement made that same year, DuPont paid off all of Durant's debt; in exchange, the controversial founder left the company. 

Durant refused to bow out of the automotive industry, however, founding Durant Motors in 1921 and producing a line of cars for the next decade. The onset of the Great Depression in the early 1930s put an end to Durant's career in cars, and he threw his entrepreneurial energy behind a string of bowling alleys located near the Buick complex in Flint, Michigan. When this venture failed as well, Durant faded from the public eye. He died on March 18, 1947, at the age of 85, just weeks before the passing of another automotive pioneer: Henry Ford.

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