By 1909, Selden's patent suit against Ford was in appellate court. Selden claimed that Ford owed him a fortune in unpaid royalties and another fortune for any vehicle Ford planned to sell in the future.
For all Henry Ford knew, the courts would agree with Selden. And while Ford was on the verge of investing heavily in his new low-priced Model T, nothing was certain.
Durant knew all that. He also knew that Ford's young key man, Couzens, was burned out. Couzens was suffering from migraines and was tired of working long hours for Ford. Durant had reason to believe the stars were aligned for a buyout.
Durant merely had to structure a deal that personally suited Ford. He did not have to convince Ford of anything — biographers note that people rarely convinced Ford of anything he didn't already believe. It was simply a matter of how much cash Ford wanted.
The answer, according to William Pelfrey's book Billy, Alfred, and General Motors, was $8 million.
But not $8 million as Billy Durant thought of $8 million. It would be $8 million as Henry Ford thought of it.
Durant was a man of credit. He understood how to parlay debt into wealth. He had gained control of Buick, Cadillac and Oldsmobile with minimal amounts of cash. But Ford had little patience for stock and debt.
Couzens brought Durant's offer to the supine Ford. Couzens said he voted yes.
"All right," Pelfrey quotes Ford agreeing from the floor, "but gold on the table." Couzens asked him what he meant.
"I mean cash," Ford answered. "And tell him I'll throw in my lumbago."
Here's what Couzens and Durant worked out: $2 million would be in stock in Durant's newly christened General Motors and $6 million would be in cash. Of the cash, said Pelfrey, $4 million would be paid over three years at 5 percent interest, and $2 million would be paid up front. A New York Times story 10 years later said Ford and Couzens had wanted the $2 million to be paid in gold.
But Durant's acquisitions and deal-making had left him short of cash. To obtain the $2 million, he turned to his New York bank, National City Bank, which was closely associated with powerhouse financier J.P. Morgan. The bank turned him down.
Pelfrey's book quotes Durant as saying, "It must be remembered that the banks, as a rule, were not at that time in favor of the automobile industry. As a matter of fact, they were extremely antagonistic.
"I made no further attempt to secure the $2,000,000 and notified Mr. Ford that the purchase could not be financed at the present time."
Durant's Ford scheme was deflated. Fourteen months later, the judge in Ford's Selden patent lawsuit decided in favor of Ford, ruling that Ford would not have to pay royalties on every vehicle it had ever sold or might ever sell.
Relieved of the uncertainty, Ford began pouring investment into production of the Model T, the car that ignited sales of low-cost vehicles to middle-class Americans. The rest of the industry — Durant's General Motors included — had to answer with low-cost vehicles of their own.