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MOVE TO HALT SALE OF GENERAL MOTORS

Topics: General Motors, Chevrolet

MOVE TO HALT SALE OF GENERAL MOTORS

The New York Times
January 1, 1916

Eight of Fourteen Directors Sign Protest Against Merger with Chevrolet Co.

PRES'T DURANT IN CONTROL

He and Associates Said to Own Nearly Two-Thirds of the Larger Concern's Common Stock.

A fight for control of the General Motors Company has been precipitated by the proposal of W. C. Durant, President of the Chevrolet Motor Company and the largest single interest in General Motors, to acquire control of the latter company for the Chevrolet. Mr. Durant proposed to turn a controlling interest in the larger company over to the Chevrolet, and to that end the capitalization of the latter was increased last week from $20,000,000 to $80,000,000. He announced that more than $10,000,000 of the $16,371,000 of General Motors common, valued at more than $50,000,000 at current quotations, had been acquired by himself and his associates. It was proposed to exchange five shares of Chevrolet stock for each share of General Motors common, and one share of Chevrolet for each share of General Motors preferred, to those assenting to the plan.

Efforts are now being made by other interests in General Motors to block the proposed sale of that company to the Chevrolet. There are fourteen Directors of General Motors, and eight of them signed a statement yesterday to be sent to shareholders. The statement reads:

The undersigned Directors of the General Motors Company have received many inquiries in regard to current reports that the control of the General Motors Company was about to be acquired by another company and asking for information in the premises. Under the circumstances they feel that they should state to shareholders that no one of the undersigned is a party to any arrangement looking to the vesting of control of the General Motors in any other corporation. We believe that the results achieved with President Nash at the head of the company have been satisfactory to shareholders.

It has been suggested by some shareholders that it would be well to form a three years' voting trust, beginning November, 1916, at which date the term of the present Board of Directors expires. A majority of the present board favors this plan. With a sufficient number of shareholders wishing to unite in forming this voting trust action to that end will be taken.

The statement was signed by Samuel F. Pryor, Albert H. Wiggin, Thomas Neal, Charles H. Sabin, James J. Storrow, C. S. Mott, Albert Strauss, and Emory W. Clark.

It was said in explanation yesterday by one of these men that he and his associates felt the greatest admiration for Mr. Durant, who is Vive President of the General Motors and a fellow director in that company, but that they would regret to see a change in management.

It was said that there has been no dissension in the General Motors Board, and that the directors opposing the consolidation would very much regret the introduction of many bitterness into the contest for control. Some of the board members believe that Mr. Durant and his associates actually control enough of the of the General Motors stock to make the plan effective, but others think that enough holders of the preferred can be rallied to block the exchange of more than half the General Motors stock. If that can be done, the Chevrolet interests can be outvoted when the next election of directors of the General Motors is held.

However, Mr. Durant and his friends hold such a large proportion of the General Motors stock that they can defeat the majority unless practically all of the majority stock is deposited under the proposed voting trust.

One of the directors in General Motors, who is opposed to the transfer, said yesterday that he would be surprised if Mr. Durant did not turn up in control when the meeting was called.