In the early days of auto manufacturing, car makers were going in and out of business almost as fast as the seasons changed, and Buick’s Billy Durant had doubts about the staying power of any manufacturer producing only one model line. All it would take to put such a company under was one year of poor sales. Durant reasoned that a consortium would buffer companies against the vagaries of the market. Also, a consortium’s production volume would mean members could manufacture their own parts, ensuring an adequate supply at the right price.

Durant’s plan was to exchange stock in a holding company for stock in the three other major manufacturing companies, but he had no luck in selling his idea –Henry Ford and Ransom Olds wanted cash, not stock. Durant, however, soon found that the Olds Motor Company, which had sold up to 6,500 Oldsmobiles a year since 1901, was in trouble.

After buying 75 percent of Olds stock, Durant incorporated the General Motors Company by exchanging GM stock for stock from Olds and Buick.