The American auto industry and the big three


    We have a proud automotive culture in the United States, but surprisingly few people know too much about the automotive history of this country. For this history lesson, we focus on the automobile “industry” rather than the history of the automobile itself.

    When it all started

    In the 1890s, the American automobile industry began, and through the use of mass production and the large size of the domestic market, quickly evolved into the largest automobile industry in the world (although this title either taken from the United States by Japan in the 1980s and then from Japan by China in 2008).

    The American automobile industry actually started with hundreds of manufacturers, but by the end of the 1920s, three companies stood out above the rest:

    1. General Engines
    2. Ford
    3. Chrysler

    The big three

    These three businesses continued to thrive even after the Great Depression and World War II. Henry Ford began building cars in 1896 and started the Ford-Motor Company in 1903. Ford used the first conveyor-belt assembly line in 1913, improving mass production of its Model T. The assembly line has drastically cut costs and the Model T sold so well that it propelled Ford into the largest automobile company in the United States

    General Motors was founded by William Durant (a former car maker) in 1908. During the first two years GM acquired Buick, Oldsmobile, Oakland (later to become Pontiac), Cadillac and a number of other automakers . Durant also wanted to acquire Ford but Henry Ford chose to keep his business independent. Becoming a bit too “acquisition happy”, Durant over-extended the business and was forced out by a group of banks who took a majority stake in the business. Durant then partnered with Louis Chevrolet and founded Chevrolet in 1913, which became a quick success. Durant regained majority control of GM after acquiring enough stock and GM acquired Chevrolet in 1917. This did not last long, however. Durant was forced out again in 1921. By the end of the 1920s, GM overtook Ford as the largest automaker.

    Former Buick president and former GM executive Walter Chrysler took control of the Maxwell Motor Company in 1920, reorganized it and reorganized it as the Chrysler Corporation in 1925. Chrysler acquired Dodge Brothers in 1927 and, in 1928 introduced the DeSoto. and Plymouth through the dealer network and manufacturing facilities that accompanied the Dodge acquisition. In the 1930s, Chrysler overtook Ford and became the second largest automaker.

    1950s and beyond

    In 1950, America produced nearly 75% of all automobiles in the world. In the early 1970s, however, American automakers (especially the Big Three) were hit hard by increased competition from foreign automakers and high oil prices. Over the next few years, companies occasionally rebounded, but the crisis peaked in 2008, prompting Chrysler and General Motors to file for receivership and be bailed out by the federal government. While Ford was also hit by the crisis, it decided to fend for itself and did not take the bailout. We actually have a lot of respect for Ford because of that. They did not choose the easy way out.

    2014 saw the highest sales (annualized and seasonally adjusted) in history with 16.98 million vehicles.

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