Pivot Point: GM looks beyond the United States

GM began its overseas empire by buying established companies

Among the purchases: Vauxhall in England, Opel in Germany and Holden in Australia

The Opel brothers of Germany, from left: Carl, Wilhelm, Heinrich, Friedrich and Ludwig
The roots of General Motors' overseas subsidiaries reach back into the pre-automotive age to saddles, sewing machines, bicycles, marine engines and even mythical creatures and knights-errant.

GM didn't become a global powerhouse overnight; it accumulated its far-flung empire piecemeal. Working according to the credo of empire builder Alfred Sloan, GM kept a hands-off policy when it came to the cultures and operations of its foreign subsidiaries, albeit with a touch of Detroit paternalism.

So while the Ford and Toyota brands span the globe, some of GM's brands remain regional. Few American consumers would know that the Saturn Astra started life in Germany as an Opel Astra or that the Pontiac G8 originated in Australia as a Holden Commodore. The Vauxhall brand is still sold only in Great Britain, even though its vehicles now are just rebadged Opels.

Sloan divided the overseas business into two categories: overseas export sales of U.S.-built vehicles and overseas production. In the latter category, the ever-cost-conscious GM decided to build its business mostly by buying established companies rather than building them from scratch, particularly the three that have kept their brand identities: Holden, Opel and Vauxhall.

Those companies have retained their names, logos and distinctive cultures.

GM's global milestones
1911: GM Export Co. established to handle sales of vehicles outside North America.
1918: GM of Canada Ltd. formed by purchase of McLaughlin Motor Car Co. McLaughlin car was based on Buick Model F.
1923: GM opened first European assembly plant in Copenhagen, Denmark.
1925: GM acquired Vauxhall Motors of Luton, England. General Motors do Brazil set up in Sao Paulo. GM established operations in Argentina, France and Germany.
1928: GM India established.
1929: GM bought Adam Opel AG in Germany. GM China opened headquarters in Shanghai.
1931: General Motors-Holden's Ltd. formed by merger of Holden's Motor Body Builders Ltd. and GM (Australia) Pty. Ltd.
1935: Opel produced the Olympia, the first car built with an all-steel integrated body and frame. GM do Mexico started operations.
1938: GM sales outside U.S. and Canada topped 350,000 units.
1948: Holden's launched Australia's first mass-produced car.
1972: GM joint venture began making vehicles in South Korea.
1980: GM announced plans to build 5 European plants: 3 in Spain and 1 each in Austria and Northern Ireland.
1986: GM acquired Lotus, English sports car maker.
1989: GM bought 50 percent stake in Saab Automobile AB of Sweden.
1993: GM sold Lotus.
1999: GM joint venture began building Buick Regals in Shanghai.
2000: GM opened modular assembly plant in Gravatai, Brazil.
2002: GM agreed to buy most of the assets of Korean carmaker Daewoo Motor Co.

A mercenary beginning

Although GM came into being in the 20th century, the origins of the Vauxhall brand stretch all the way to the 13th century.

That's when King John of England employed a mercenary soldier named Fulk le Breant. The story has a fairy tale ring to it. In exchange for his service, the king rewarded Fulk with some land south of the River Thames in London. The land became known as Fulk's Hall, which morphed into Fox Hall, then Vaux Hall and, finally, Vauxhall.

Fulk adopted an emblem featuring a mythical creature called a griffin, with the body and hind legs of a lion and the head, wings and talons of an eagle. A modern version of his emblem still graces the hoods of today's Vauxhall vehicles.

In the 19th century, marine engineer Alexander Wilson founded the Vauxhall Iron Works on the site of Fulk's former property and built marine engines there. In 1897, the ironworks built a single-cycle gas engine to power a river launch named the Jabberwock.

After further development, a version of the Jabberwock engine was installed in Vauxhall's first automobile, built in 1903. The engine produced 5 hp, and the driver steered with a tiller.

Vauxhall moved to Luton, England, north of London, in 1905. But it wasn't until 1925 that GM bought Vauxhall, for $2.5 million.

Vauxhall wasn't even GM's first choice for gaining a toehold in England. That would have been Austin. But Sloan and his emissary, James Mooney, who headed General Motors Export Cos., got cold feet and backed off.

A 1907 poster of the Opel complex in Ruesselsheim, Germany

GM says non! to Citroen

Six years before the Vauxhall acquisition, GM made its first attempt to find a European partner, casting its acquisitive gaze on French carmaker Citroen. In 1919, Billy Durant dispatched a team, which included Sloan, to Paris to talk Andre Citroen into selling 50 percent of the company he had founded.

After several weeks of intense discussions, GM decided to pass on Citroen because the GM team thought it would have to invest too much to modernize Citroen factories. Michelin would buy Citroen.

GM's decision on Citroen would haunt Sloan because the American company never did manage to set up vehicle production in France.

Key acquisition in Germany

GM had much better luck in Germany, where Adam Opel had become a powerhouse long before GM arrived on the scene.

In 1862, Adam Opel, a journeyman metalworker, launched a sewing machine business in his hometown of Ruesselsheim, Germany. The sewing machine business thrived, and Opel built a factory with adjoining living quarters for employees in 1868. In 1872, Opel even set up a health insurance plan for his workers.

Opel and his wife, Sophie Scheller, had five sons who became avid bicyclists. So the Opel factory began making bicycles and became the world's leading bicycle maker.

Adam Opel died in 1895, four years before the company made its first car. It bore the cumbersome name "Opel Patent Motor Car, System Lutzmann," taking part of the name from the company's first partner, Friedrich Lutzmann.

After Adam Opel died, his widow and five sons managed the company. But car sales were poor, so they parted company with Lutzmann and signed a new deal with a French manufacturer, Alexandre Darracq, to put Opel bodies on Darracq chassis.

By 1914, Opel had become the largest carmaker in Germany and a technology leader. The company developed race cars with four-cylinder engines featuring four valves per cylinder and an overhead camshaft.

By 1928, Opel was the volume leader in Germany, selling 44 percent of all the German-made cars sold in that country and 26 percent of all cars sold there.

Opel's advanced technology and modern manufacturing plants caught the eye of Sloan, who was looking for a larger footprint in Europe.

Sloan and his team decided to buy Opel for $26 million. He liked the idea of acquiring a company that already had established itself in its home country.

"The acquisition would give General Motors the Opel dealer organization, and we would acquire a 'German background,' instead of having to operate as foreigners," Sloan wrote in My Years with General Motors.

GM wrapped up the Opel purchase in January 1929, just nine months before the stock market crashed, plunging the world into the Great Depression.

Opel continued to thrive as Europe's largest carmaker in the 1930s, but Adolf Hitler's Nazi regime halted car production in 1940. The German government took over the company, and Opel's plants were converted to produce trucks and military equipment for the German war effort. In 1944, Allied bombs inflicted major damage on the Ruesselsheim and Brandenburg plants.

After the war, the Soviet Union dismantled the Opel Kadett production line and shipped it eastward as war reparations. The reconstruction of Ruesselsheim wasn't finished until 1950.

A 1925 Vauxhall touring car

Holden's history

Like Vauxhall and Opel, Australia's Holden established itself long before GM took it over.

In 1856, a 21-year-old Englishman named James Holden set up a saddle and harness making business in Adelaide, Australia. In 1885, Holden merged with carriage builder Henry Frost to form Holden & Frost.

In 1899, Holden & Frost got an Australian government contract to make saddles and harnesses for the Boer War in South Africa.

The Holden company began making motorcycle sidecar bodies in 1913 and built its first car body in 1914, the year GM began exporting American cars to Australia.

Through the 1920s, Holden developed a reputation as a builder of automotive bodies that were put on chassis imported for a variety of American and European marques.

Independently, GM established General Motors Australia Pty. Ltd. in Melbourne and opened plants in Melbourne, Sydney, Brisbane, Adelaide and Perth.

When the Depression hit, orders for car bodies plunged, catching Holden by surprise. GM rode to the rescue of its esteemed coachbuilder, buying the company in 1931 and forming General Motors-Holden's Ltd.

It wasn't until after World War II that Holden's really got into full-scale carmaking as part of a government effort to jump-start industrial production. In 1945, GM-Holden's started gearing up for the job.

The effort turned into quite an adventure, as Sloan told it. In 1945 and 1946, GM "assembled in Detroit a team of about 30 American engineers and their Australian understudies." The group built three prototypes in Detroit.

"In the fall of 1946, those men and their families — some 75 persons — left Detroit on a specially chartered Canadian Pacific train to Vancouver," Sloan wrote in My Years with General Motors. "With them were test cars, all the required engineering data, several tons of drawings and prints, and a good deal of the spirit of Detroit.

"A specially chartered steamship took them from Vancouver to Australia in December 1946. Their first production for the Australian market was in 1948, when 112 cars were sold."

In recent years, GM has turned to Holden for rear-drive platforms to be sold in North America. Current examples are the Chevrolet Camaro and Pontiac G8.

You can reach Bradford Wernle at bwernle@autonews.com

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