General Motors acquires Chevrolet

General Motors acquires Chevrolet on May 2, 1918, in a deal that put GM founder Billy Durant back in charge of the automotive giant.

Durant built the original General Motors, starting with Buick in 1908, from pieces of several other automakers, but his aggressive acquisitions forced him out of the company in 1910.

As revenge, Durant went out and started another automaker in November 1911 -- Chevrolet, named for Swiss race car driver and business partner Louis Chevrolet.

As Chevy grew quickly, Durant, still a major GM shareholder, made other GM shareholders an offer they couldn't refuse -- five shares of Chevrolet for every one of GM. On May 2, 1918, the deal ended with GM owning Chevrolet and Durant in charge of both.

Durant lasted two years before being ousted again -- this time by Pierre S. DuPont, an investor whose family’s influential chemical company had begun buying GM shares in 1914.

DuPont became GM chairman in 1915 and was named president in 1920. That same year, DuPont paid off all of Durant’s debt and in return the controversial founder left the company for good.

Durant started another car company, Durant Motors, in 1921 but lost most of his fortune in the Great Depression and spent a few years operating a chain of bowling alleys near Flint, Mich.

Durant died in poverty in 1947 at age 85, just weeks before the passing of another automotive pioneer: Henry Ford.

By 1917, behind sales of the 490, Chevrolet ranked fourth among U.S. brands. By 1919, Chevrolet was second in sales only to Ford, with the 490 remaining as popular as ever with sales of 127,231 units.

But by 1921 GM was deep in debt and hemorrhaging money. Chevrolet lost $8.7 million in 1921 and was stuck with 150,000 unsold 490s.

Alfred Sloan, serving as special adviser to DuPont, began to question the viability of Chevrolet and hired a group of industrial engineers to study the brand.

They determined Chevrolet faced an uphill battle to match the scale and profits of Ford, and they recommended that the division be liquidated.

Sloan, for reasons never explained, decided to keep and restructure Chevrolet under a new boss: William S. Knudsen, a former production manager at Ford Motor Co.

Knudsen dropped the 490 after the 1922 model year and replaced it with the Superior.

In 1929 Knudsen introduced Chevy's "six for the price of a four," making an astoundingly quick model changeover to a new model with a bigger engine.

During its years of production and decades of faithful service, the engine came to be known as the "cast iron wonder" and the "stove bolt six."

It was the industry's first mass-produced overhead-valve six-cylinder engine. Before 1929, four-cylinder engines powered Chevrolets. The new and more powerful six helped GM capture more than 40 percent of the U.S. market by 1931, up from 14 percent in 1921.

And Chevrolet really never looked back for decades. In 1936, Chevrolet began a remarkable streak: It outsold Ford 44 times in 47 years.