Coachbult.com - General Motors Corporation

The Yellow Coach name was retired in 1943 as GM divisions were revised during the wartime haitus in bus production. When production of buses resumed in February 1944, the buses were identified with GM nameplates.

1909 - General Motors acquires the Rapid Motor Vehicle Company of Pontiac, Michigan, the predecessor of GMC Truck, and Reliance Motor Truck Co. of Owosso, Michigan. A Rapid becomes the first truck to conquer Pikes Peak in 1909.

General Motors Truck Company (later known as GMC) is organized on July 22, 1911, to handle sales of GM's Rapid and Reliance products.

1925 - Yellow Truck and Coach Manufacturing Company is organized, with General Motors Truck as a subsidiary and General Motors Corporation holding a large interest.

1943 - General Motors acquires all assets of Yellow Truck & Coach, and the GMC Truck & Coach Division is formed.

In 1925, the Yellow Cab Co. of Chicago--created by John D. Hertz of rent-a-car fame--merged with General Motors Truck Co. For a while, Hertz remained president and manufacturing operations were in Chicago, but eventually the business relocated to Pontiac and survived until the late 1930s making General Cabs. To sell his taxis, Hertz had created a financing program, which later evolved into General Motors Acceptance Corp.

One reason General Motors' top management had been attracted to Hertz's company was because it built Yellow Coach buses. Bus manufacturing was a fast-growing business at this time. GMC executives engineered a merger with Yellow Motor Coach Manufacturing, which led to the formation of Yellow Truck and Coach Manufacturing Co., with the General Motors Truck Co. as a subsidiary. Later, the bus-building operation also found its way to Pontiac.

During the 1930s, GMC made everything from 1/2-ton pickups to 10-ton trucks to chassis for truck trailers. Many bus lines bought GMC-made Yellow parlor coaches. These were top of the line buses designed specifically for over-the-road passenger-coach use. They were actually commercial versions of a Cadillac passenger car using a Cadillac engine and modified Cadillac chassis. The rear end was similar to that of a railroad car, with an observation deck and scalloped awning. One important new light truck of this era was the 1936 Suburban, which combined carlike convenience with the utility of a truck. GMC also began offering factory-built pickup trucks in 1936.

Bus historian Larry Plachno--editor and publisher of National Bus Trader--has described the 1930s as "the greatest single decade of development for the intercity coach" and in the late 1930s, Yellow Coach remained the leader in the field in terms of both innovation and sales. Its new ideas included the invention of angle drive, improved integral construction, rear-mounted engines and below-the-floor luggage compartments. A 1938 milestone was the use of partial monocoque construction on new 1200 series buses. These were designed for intercity use and became Yellow Coach's top of the line models.

Diesel engine advancements were the big news of 1937. Yellow Coach and GM's Detroit Diesel Division started development of the "71" series of inline diesel engines, with 71 cu. in. in each cylinder. There were two-, three-, four- and six-cylinder versions identified as the 2-71, 3-71, 4-71 and 6-71. These were two-cycle engines, which GM preferred over the more fuel-efficient four-cycle designs that had lower power-to-weight ratios.

The famous Greyhound "silversides" bus was a Yellow Coach design first seen on a prototype displayed at the 1939-1940 New York world's fair. This handsome model had fluted aluminum siding like many streamlined passenger trains of the era. During 1940 to 1942, over 500 transit buses per year were built. Some had steel bodies, which were used to conserve aluminum as war approached.

With the outbreak of World War II, Yellow Truck & Coach started making six-wheel-drive military trucks. Between 1943 and 1945, about 527,100 of these 2-1/2-ton "Jimmys" were built in different lengths, configurations and body styles including cargo trucks, dump trucks, tankers, bomb transporters and fire engines. An amphibious version called the DUKW--and nicknamed the "Duck"--was developed in 43 days. It proved to be so good that 2000 copies were built and earned fame in combat. In September 1943, GM bought out the assets of Yellow Truck & Coach and renamed it GMC Truck & Coach Division.

GMC resumed building civilian trucks under War Production Board authorization in March 1944. These were called "Victory" or "interim" models. For high achievement in the production of war equipment, GMC Truck & Coach Division received an Army-Navy "E" award on June 2, 1944. On the last day of the year, Morgan D. Douglas was appointed general manager of the Truck & Coach division.

by Bradford Snell

The electric streetcar, contrary to Van Wilkin's incredible naīve whitewash, did not die a natural death: General Motors killed it. GM killed it by employing a host of anti-competitive devices which, like National City Lines, debased rail transit and promoted auto sales.

This is not about a "plot" hatch by wild-eyed corporate rogues, but rather about a consummate business strategy crafted by Alfred P. Sloan, Jr., the MIT-trained genius behind General Motors, to expand auto sales and maximize profits by eliminating streetcars. In 1922, according to GM's own files, Sloan established a special unit within the corporation which was charged, among other things, with the task of replacing America's electric railways with cars, trucks and buses.

A year earlier, in 1921, GM lost $65 million, leading Sloan to conclude that the auto market was saturated, that those who desired cars already owned them, and that the only way to increase GM's sales and restore its profitability was by eliminating its principal rival: electric railways.

At the time, 90 percent of all trips were by rail, chiefly electric rail; only one in 10 Americans owned an automobile. There were 1,200 separate electric street and interurban railways, a thriving and profitable industry with 44,000 miles of track, 300,000 employees, 15 billion annual passengers, and $1 billion in income. Virtually every city and town in America of more than 2,500 people had its own electric rail system.

General Motors sought to reduce competition from electric railways through a variety of measures, including the use of freight leverage. GM, for decades, was the nation's largest shipper of freight over railroads, which controlled some of America's most extensive railways. By wielding freight traffic as a club, GM persuaded railroads to abandon their electric rail subsidiaries.

With a pack of notorious mobsters, GM helped purchase and scrap the street railways serving Minneapolis-St. Paul.

Members of GM's special unit went to, among others, the Southern Pacific, owner of Los Angeles' Pacific Electric, the world's largest interurban, with 1,500 miles of track, reaching 75 miles from San Bernardino, north to San Fernando, and south to Santa Ana; the New York Central, owner of the New York State Railways, 600 miles of street railways and interurban lines in upstate New York; and the New Haven, owner of 1,500 miles of trolley lines in New York, Connecticut, Rhode Island and Massachusetts.

In each case, by threatening to divert lucrative automobile freight to rival carriers, they persuaded the railroad (according to GM's own files) to convert its electric street cars to motor buses -- slow, cramped, foul-smelling vehicles whose inferior performance invariable led riders to purchase automobiles.

As the largest depositor in the nation's leading banks, GM also enjoyed financial leverage over the electric railways, which relied heavily on these banks to supply their capital needs. According to U.S. Department of Justice documents, officials of GM visited banks used by railways in Philadelphia, Dallas, Kansas City and other locations, and, by offering them millions in additional deposits, persuaded their rail clients to convert to motor vehicles.

Where these measures were unavailing, GM formed holding companies to buy up and motorize the railways directly. Thus, it helped organize and finance United Cities Motor Transit as a wholly owned GM subsidiary, as well as Greyhound, Rex Finance, Omnibus Corporation, National City Lines, Pacific City Lines, American City Lines, City Coach Lines, Manning Transportation and numerous other concerns, which acquired rail systems across the country, including those in New York, Los Angeles, Chicago, Philadelphia, Baltimore, Washington, St. Louis, Salt Lake City, Sacramento, San Diego and Oakland.

With officials of Greyhound and National City, it helped acquire and dismantle the $50 million North Shore Line, the fastest electric service in the world, providing Wisconsin's lakeshore cities and Chicago's northern suburbs high-speed access to the downtown loop. With a pack of notorious mobsters, it helped purchase and scrap the street railways serving Minneapolis-St. Paul.

Where rail systems could not be bought, GM bought rail officials instead, giving Cadillacs to those who converted to buses.

And where rail systems were publicly owned and could not be bought, like the municipal railway of St. Petersburg, Florida, GM bought their officials instead, according to FBI files, providing complimentary Cadillacs to those who converted to buses.

GM admitted, in court documents, that by the mid-1950s, its agents had canvassed more than 1,000 electric railways and that, of these, they had motorized 90 percent, more than 900 systems.

Van Wilkins, in his piece, went to considerable lengths to discount GM's role in the death of the American trolley, perfervidly propounding alternative explanations such as "proliferating" autos (this, properly, not the cause but rather the result of the trolley's demise), government road building (inspired, fundamentally, by GM-organized road lobbies), and unsympathetic traffic engineers (virtually all of whom, at one time or another, studied at GMI, the automaker's private accredited university).

He even endeavored to whitewash GM's criminal conviction regarding National City Lines, declaring, not without sarcasm, that "no one was convicted of plotting to destroy the street railway industry." In fact, everyone involved knew that GM's purpose in organizing National City was, precisely, to destroy the electric railways and to replace them with GM buses. The federal prosecutors knew. In their draft indictment, they declared that the rationale underlying GM's financing of National City was "adoption by defendant National of a program to eliminate electrically propelled conveyances...."

The assistant U.S. attorney general knew. The "result" of GM's plans, he declared, "has been the elimination of electrically propelled vehicles and the substitution of motor buses in a number of cities."

"An organized campaign to deprive the American public of their splendid electric railway systems."

E.J. Quinby, president and founder of the Electric Railroader's Association, who bravely persuaded the government to bring the lawsuit against GM and its powerful automotive allies, also knew. GM, he wrote in a detailed 25-page letter to the U.S. attorney general, had combined with Standard Oil of California (Chevron), Phillips Petroleum, and Firestone, to form National City as part of "an organized campaign to deprive the American public of their splendid electric railway systems..."

Van Wilkins sought to diminish the significance of National City Lines by claiming that, with regard to railways acquired in Tulsa, Salt Lake City and Los Angeles, the decision to abandon at least some of the electric lines had already been made. Yet this was not at all unexpected, for National was but part of GM's multifaceted anti-rail strategy. Tulsa, for example, as acquired and converted by another GM-assisted holding company, Rex Finance, before it was turned over to National. GM agents pressed Salt Lake City to convert to buses before GM's Pacific City Lines bought the system.

Likewise, GM was involved in Los Angeles Railway decades before its acquisition by National. As early as 1923, interests associated with GM threatened to parallel the railway with double-decker buses and "skim the cream" of its short-haul trade, thereby weakening its resolve; by 1939, National and other holding companies allied with GM (namely, Omnibus and City Coach) were jockeying to buy the railway and convert it to GM buses.

[Van Wilkins] claimed, with respect to Baltimore, St. Louis, Philadelphia and Oakland, cities in which National acquired the railways expressly to abandon them, that other factors, including the antipathy of traffic engineers and politicians, might also have contributed to the trolley's demise. Indeed, this was possible, given GM's willingness to generously reward those who promoted its mobilization objectives.

Finally, he derived solace from a list of cities not acquired by National that nevertheless lost all or part of their electric railways. But here, as before, he failed to comprehend that National was but one of myriad devices employed by GM since 1922 to eliminate the trolley. The railways of Boston, Detroit, San Francisco, Seattle, as well as those of Canada were publicly operated and unavailable for purchase; but this did not preclude GM, which was equally active in Canada, from using bribes and other inducements to persuade their officials to motorize.

Indeed, in San Francisco and Seattle, it arranged for one of its former regional bus managers, the ex-president of its United Cities subsidiary, to become manager and transit czar. In northern New Jersey, Atlanta, Kansas City, Denver, Dallas, and Houston, it relied on banking connections to facilitate abandonment; in Chicago and Milwaukee, it relied on Greyhound, Omnibus, City Coach, and National; in Portland, on United Cities, Pacific Cities and Manning Transportation; in Miami, Cleveland, Cincinnati, Louisville, Memphis, and Pittsburgh, on freelance agents and former GM and National officials; in New Orleans and Indianapolis, on gifts to high-placed executives; in Minneapolis, on unprincipled gangsters.

The streetcar did not die, as Wilkins contended, because of demographics or economics or disinvestments or evolution; it died because GM in 1922 made a conscious decision to kill it and, for the next several decades, pursued a strategy designed to accomplish this objective. Yet, by reason of timidity or negligence or ignorance or cowardice, Wilkins simply cannot bring himself to admit that a powerful corporation would seek to maximize profits by eliminating its competition.

He refused, in his piece, to admit GM had motorized a single system: when he alluded, for example, to the motorization of Manhattan, he said only that its railway "came under the control of bus interests."

Because they were affiliated with GM -- a corporation he felt obliged to protect.

Take courage, Van Wilkins, before the only rails left in America are those used to reinforce concrete in the double-deck freeways GM has projected for Los Angeles and other metropolitan areas.

The subject of GM and the electric railways is far too complex and detailed to summarize in a few pages. I have attempted briefly to describe some of the major activities undertaken by GM, directly or indirectly, since 1922 to destroy the nation's electric streetcar and interurban systems.

Postscript: For further information, I would direct those interested to my earlier treatise on this matter, "American Ground Transport," which is to be found in Part 4A of Hearings in S. 1167, The Industrial Reorganization Act, before the Subcommittee on Antitrust and Monopoly of the Committee of the Judiciary, U.S. Senate, 93rd Congress, 2nd Session (Washington, D.C.: 1974).

Bradford Snell is a former U.S. Senate Counsel. His 1974 report gave national prominence to the General Motors/National City Lines conspiracy case. His history of GM will be published in 2002 by Alfred A. Knopf.

Editor's Note: The following article was originally published in The New Electric Railway Journal in Autumn 1995. In it, Mr. Snell responsed to an earlier article by Van Wilkins, who claimed commuter rail lines vanished due to causes other than the conspiracy by GM and other companies to put them out of business.

GMC New Look Buses
First manufactured in 1959, the GMC "New Look" or "Fish Bowl" buses were a common sight in the cities of North America. Over 35,000 units were built in several configurations in the United States and Canada. The final units were produced in 1986 in Canada.

Excerpts from the Film by Jim Klein and Martha Olson

This is a story about how things got the way they are. Why sitting in traffic seems natural. Why our public transportation is the worst in the industrialized world. And why superhighways cut right through the hearts of our cities. This is a story about how the auto and highway industries reshaped America.

WHAT'S GOOD FOR GM . . .

Narrator:
When you're talking about public transportation in America, for the first part of this century, you're talking about streetcars. Trolleys ran on most major avenues every few minutes. Steel track and quiet electric motors made the ride smooth and clean and comfortable. The center of the road was reserved for streetcars, and the new automobiles had to move out of the way.

Bradford Snell, who has made a career researching the auto industry for 16 years:
In 1922, only one American in ten owned an automobile. (Everyone else used rail.) At that time Alfred P. Sloan (President, General Motors) said, "Wait a minute, this is a great opportunity. We've got 90 percent of the market out there that we can somehow turn into automobile users. If we can eliminate the rail alternatives, we will create a new market for our cars. And if we don't, the General Motors' sales are just going to remain level.
They had to get rid of the streetcars. They wanted the space that the streetcars used for automobiles. They had to find something they could put in place of the streetcar. Sloan had the idea that he wanted to somehow motorize all the major cities in the country. That meant replacing all the street railways with buses - ultimately thinkng that no one would want to ride the buses and therefore they would buy General Motors automobiles.
Sloan wanted to get in very big in this field. What he bought was phenomenal: the largest bus-operating company in the country and the largest bus-production company. And using that as a foothold, GM moved into Manhattan. They acquired interests n the New York railways and between 1926 and '36 they methodically destroyed the rails. When they finally motorized New York, General Motors issued ads throughout the country. And this is important, because they are trying to show that motorization is the wave of the future. They issued these ads and they said, "The motorization of 4th and Madison is the most important event in the history of community transportation."

Narrator:
In the mid-1930s, GM worked hard to create the impression of a nationwide trend away from rail. But there was no trend.
Buses were a tough sell. They jolted. They smelled. They inched through traffic. City by city, it took the hidden hand of General Motors to replace streetcars with Yellow Coach buses.
In 1936, a company was founded that would grow to dominate American city transportation. National City Lines had no visible connection to General Motors. In fact, the director of operations came from a GM subsidiary, Yellow Coach, and members of the Board of Directors came from Greyhound, which was founded and controlled by General Motors.
The money to start this new company also came from Greyhound and Yellow Coach. To hide these connections the company needed a front man.
Roy Fitzgerald got his start in Northern Minnesota where he hauled miners and school children in a couple of buses. General Motors would groom him to become president of National City lines.
Over the next few years, Standard Oil of California, Mack Truck, Phillips Petroleum and Firestone Tire would join GM in backing this venture.

THE PLOT THICKENS . . .

Jim Holzer, L.A. railway worker:
All of a sudden you get these fellows with fedora hats, the spats - I'm not making that up - the two-toned shoes, the broad ties, the blackshirts, the white Panamas. All of sudden they show up and of course the word goes out: "Hey, we're being bought."

Business Week (voice over):
Fitzgerald, big name in buses. National City now in top place as operator of city route miles. Prime mover is E. Roy Fitzgerald, who describes himself as one of five farm boys trying to run a few buses.

Holzer:
The Fitzgeralds came in here just like they did in every city they ever went to. They destroyed an established public-transit system that had been built to meet the needs of the people.

Former Streetcar Rider #1:
Those streetcars, we loved riding in them. It was fun because it was big, you know; there was plenty of room and all that.

Rider #2:
We'd catch them at the same time every day. We'd know the same conductor and you'd meet people that you'd see every day. And you weren't afraid to talk to someone.

Rider #3:
The streetcar was fast. It just jumped - the cars like that - it was so fast. And then the conductor, every time he would come to a crossing, he would do 'clang, clang, clang, clang, clang.'

Rider #4:
That was the best form of transportation. Then somebody had the bright idea to take up all the tracks and get rid of all the trolleys. That's when the headaches started.

Interviewer:
Weren't those streetcars making money in Los Angeles?

Barney Larrick, Fitzgeralds' operations manager:
Well, after I got done chopping their heads off we made money. Cut the miles down. Sell off the properties. Pull the company down.

Holzer:
They don't take the service out, they just cut it back. They'll take and cut it from 10 minutes to 12 minutes, from 12 minutes to 15, from 15 to 20, from 20 to 30. So they reduce the service.
And every time you reduce the service you make it less attractive. And the less attractive the fewer riders. And then they say, "Well see, we can't make any money.' So they abandon it.

Narrator:
National City Lines grew quickly. By 1946 it controlled public-transit systems in over 83 cities. From Baltimore to St. Louis, Salt Lake City to L.A., two buses in Eveleth, Minnesota, had grown into an empire.

Snell:
The appearance was always that this was only a company that was owned by the Fitzgeralds. You know, these people had come from Minnesota with no money at all, and all of a sudden they were in control of this multi-million-dollar enterprise.
But, in fact, the money was coming from the corporate sponsors.

Quinby Memo (voice over):
To the Mayor, to the City Manager, to the City Transit Engineer, and to the taxpayers and the riding citizens of your city. You are entitled to this warning: There is a carefully, deliberately planned campaign to swindle you out of your electric railway system . . .

Narrator:
Edwin Quinby was a rail buff with a talent for financial sleuthing. In 1946, he mailed a warning to influential people in hundreds of cities across the country. His 33-page broadside was filled with surprisingly detailed research. It brought to light what GM had worked hard to hide.

Edwin Quinby (voice over):
The plan is to destroy public utilities, which you'll find impractical to replace after you discover your mistake. Who are the corporations behind this? Why are they permitted to destroy valuable electric railways?

Mass Transportation Magazine (voice over):
Queer Case of Quinby, by Ross Schram. Edwin J. Quinby took full advantage of the great American privilege of the free press to feed the lunatic fringe of radicals and crackpots springing up like weeds in the United States today. The document, printed on cheap paper, is natural fertilizer for suspicions, for disunity. What is the Quinby pattern? Was he used by some strange political influence?

Narrator:
Edwin Quinby's efforts did not stop National City Lines, but the cat was out of the bag. In 1946, the Justice Department began an antitrust investigation into National City Lines, General Motors and the other investors.

Justice Memo (voice over):
Memorandum to the United States Attorney General: It appears that National City Lines and its manufacturing associates have entered into a plan to secure control over local transportation in important cities throughout the United States. If these companies are permitted to continue to continue their program, they will soon have a stranglehold over the industry.

Snell:
The key lawyers involved in the case told me there was not a scintilla of doubt that these defendants, General Motors and the others, had set out to destroy the streetcar system.
But since there was no antitrust law on the books at that point saying, "Thou shalt not destroy streetcar systems,' the best way, the only way they could get them on a violation was to proceed along the criminal antitrust, conspiracy route. And that's what they did.

Narrator:
The government's case was straight forward. National City Lines, General Motors and the other defendants were found guilty of conspiracy to monopolize the local transportation field.

Snell:
These companies, that had probably eliminated systems that in order to reconstitute today would require maybe $300 billion, these companies were individually fined $5,000.
And the individuals involved - like the treasurer of General Motors who had actively run Pacific City Lines, one of the subsidiaries, and was a major moving factor in all of National City Lines' operations - he was fined the magnanimous sum of $1 at the conclusion of the trial.

Narrator:
The Justice Department would spend the next 25 years trying to limit GM's influence on transportation. It would begin three major investigations into monopoly practices: two were settled out of court; one was eventually dropped. An effective way to rein in GM was never found.

"Taken for a Ride," a 55 minute film shown on PBS this August, is available (rent: $55; sale: $90) from New Day Films, 314 Dayton St. #207, Yellow Springs, OH 45387; (513) 767-9357. Why not organize a showing in your community?

General Motors Streetcar Conspiracy

The General Motors Streetcar Conspiracy is a popular urban legend that General Motors illegally acquired many US streetcar systems and replaced them with buses for the express purpose of promoting the automobile.

By labelling the covert operation a 'conspiracy' and filing it under 'urban legends,' would-be apologists undercut what was actually a consummate business strategy crafted by Alfred P. Sloan, Jr, the MIT-trained genius behind General Motors, to expand auto sales and maximize profits by eliminating streetcars. In 1922, according to GM's own files, Sloan established a special unit within the corporation which was charged, among other things, with the task of replacing America's electric railways with cars, trucks and buses.

An article by Bradford Snell mentions that General Motors was convicted of conspiracy in 1949 (and fined $5000!) in their program to buy up and destroy electric urban trolley systems so that urban transit would be forced to rely on GMC buses and that this is the principal reason that modern-day trolley systems are rare in the United States today.

Bradford C. Snell makes his case against GM.

This belief has been questioned by Sy Adler who points out that, among other things, that General Motors was not convicted of buying up urban trolley systems but rather merely of forcing bus companies owned by General Motors to use General Motors buses and that trolley ridership peaked in the 1920 before GM's actions. The trolley industry's problems largely predated GM's interest.

Evidence in favor of the conspiracy are claims that, for instance, between 1926 and 1936 General Motors (GM) acquired New York Railways. By underinvestment and bad services the public transport system was systematically destroyed. In the mid-1930s GM advertised a trend away from rails, despite there was no such trend. Together with Standard Oil, Phillips Petroleum, Mack Truck and Firestone Tires, GM backed a joint venture called Yellow Coach to take over public transport city by city. Bad service reduced reliability and thus actively created the trend towards private transport that GM advertised. The companies were found guilty by a court of antitrust behavior and restraint of trade and fined a token amount.

Evidence against the conspiracy are that automobile ownership was rising everywhere, with and without GM purchasing the local streetcar systems. Streetcars were being converted to buses almost everywhere, including cities like London, England, without GM involvement, because buses were seen as the new technology at the time and were more flexible than streetcars, as they could route around track blockages for instance, and could use any road, not just roads with tracks, thereby off-loading infrastructure costs to the municipality.

Some documentation of the rapid transit interurban systems is often best provided by the history buffs, such as The Electric Railway Historical Association of Southern California.

Between 1936 and 1950, National City Lines, a holding company sponsored and funded by GM, Firestone, and Standard Oil of California, bought out more than 100 electric surface-traction systems in 45 cities (including New York, Philadelphia, St. Louis, Salt Lake City, Tulsa, and Los Angeles) to be dismantled and replaced with GM buses... In 1949 GM and its partners were convicted in U.S.district court in Chicago of criminal conspiracy in this matter and fined $5,000.

"General Motors' Destruction of California Transit Systems" provides some documentation of GM front companies and hostile takeovers of 'Key System' transit systems in California.



Yellow Coach - 1923-1943- GMC Truck & Coach Division, General Motors Corp. - 1943-present - Detroit, Michigan