THE RISE AND FALL OF FORD AND GENERAL MOTORS IN THE U.S. AUTOMOBILE INDUSTRY: A TALE TWICE TOLD
Lawrence J. White
How are the mighty fallen in the midst of the battle!
-- 2 Samuel 1:23
The U.S. automobile industry's existence has now reached the century mark, with formal production of motor vehicles having started in the last decade of the nineteenth century. During these hundred years there have been two eras during which a single firm played a role as the dominant firm in the industry: The Ford Motor Company had this position from about 1913 until the mid-1920s, and the General Motors Corporation had it from the early 1930s through the late 1970s.
This industry thus provides us with two opportunities to examine the behaviors of dominant firms and of the other firms in its industry. The particular eras during which these separate episodes occurred--the first during the comparative youth of the industry, the second encompassing its considerably more mature phase--provide differing backdrops. There are interesting insights that can be gained from these experiences.
As will be clear in the discussion that follows, basic economic forces were clearly important in the shaping of the automobile industry and in the rise and fall