How Chevrolet and General Motors Became One Company

Few automotive brands have a history as fascinating as Chevrolet, a company born from the partnership between race car driver Louis Chevrolet and entrepreneur Billy Durant. What began as a successful luxury automobile manufacturer soon became the center of a power struggle that would reshape the American auto industry. This is the story of how Chevrolet grew from an independent startup into a cornerstone of General Motors and one of the world's most recognizable car brands.

General Motors' and Chevrolet's History

In 1913, Louis Chevrolet, the Swiss race car driver, left the company that he and Billy Durant had started in 1911. Louis Chevrolet and Billy Durant started Chevrolet in November 1911 after Billy Durant was forced out as the head of General Motors in 1910 after overleveraging the company with a string of acquisitions. When Chevrolet started, it focused on using the Chevrolet name to create a luxury automobile brand. Initially, it did this very successfully, making a profit of $1.3 million in 1912 and 1913.^[1]

However, this profitable partnership didn't last very long and by 1913, Louis Chevrolet and Billy Durant fought over a variety of issues, including the fact that Durant liked to have a cigar in his mouth when he met with customers and suppliers.^[2] But most importantly, Chevrolet wanted to only make top-of-the-line luxury vehicles, while Durant wanted Chevrolet to also compete with Ford's Model T. Chevrolet ended up selling his shares of the company that had his name on it to Durant in 1913.

After the Split

Chevrolet went on to start the Frontenac Motor Company in 1915 which focused on building race cars and by 1920, he had seven vehicles participating in the Indianapolis 500.

Chevrolet Merges with General Motors

In the meantime, Durant continued to ambitiously grow the Chevrolet company. On May 2, 1918, Chevrolet had grown large enough where Durant engineered a reverse merger with General Motors, combining the two companies and once again becoming the President of General Motors.

Durant’s Final Loss of Control

When 1920 arrived, the world was struck by a financial downturn, once again placing Durant’s General Motors in financial straits. Only this time, Durant would lose control of both Chevrolet and General Motors for good. In November 1920, Durant was forced to sell his shares Pierre S. Du Pont who had been acquiring shares in General Motors since 1914 and currently owned a majority stake in the company while also sitting on the board of directors.^[3]

Both Chevrolet and Durant went on to start other business endeavors during their lives, and experienced some successes along the way. However, both men ended their lives as men of average stature whose wealth had escaped them.

Chevrolet and General Motors Become One Company - YouTube Short