General Motors Co. Starts Rumor Anew

The New York Times
December 28, 1908

Merger of Olds and Buick Concerns Revives Holding-Company Talk.

MAY BECOME BIG COMBINE

New Company Believed to Contemplate Consolidation of Prominent Low-Priced Cars.

The announcement last week of the formation, as a New Jersey corporation, of the General Motors Company, supposed to the much-talked-of holding company which is to absorb all of the producers of low-priced cars in the automobile market, has created quite a flurry of interest.  It is said that three-quarters of the stockholders of the Olds Motor Works at Lansing and a proportion of the Buick Motor Company of Flint, Mich., have already assented to a merger plan whereby the new corporation assumes their stock, issuing in its stead on a satisfactory basis its preferred and common stock.  It is understood that the stockholders of varoius other concerns will be shortly approached, and that if the plans of the General Motors Company promoters bear full frutition there will be a practical consolidation of all the more prominent makers of low-priced cars.

The General Motors Company, as incorporated in New Jersey, has a capitalization of $12,500,000, divided into shares of $1 par value.  The proportion of preferred to common stock is &7,000,000 of preferred to $5,500,000 of common.  The preferred stock pays 7 per cent. cumulative dividend.  It is generally understood that Curtis R. Hathaway, an associate of Ward, Hayden & Satterlee of New York, is interested in the new corporation, though Mr. Hathaway and his law partners are uncommunicative in the matter and refuse to discuss it until "the proper time comes."

Mr. Satterlee's name has been mentioned at various times in the rumored formation of other motor mergers in connection with the names of other well-known Wall Street interests.  These reports, although widely circulated, have never elicited either an affirmation or denial from an authoritative source.  Indeed there has been much to give color to them.

From the Maxwell-Briscoe factory at Tarrytown there emanated a statement some six months ago discussing in general terms the proposed consolidation of the Maxwell and Buick interests, which was then freely talked of.  This statement, however, did no more than acknowledge that such a consolidation had been discussed, and concluded with the declaration that no announcement thereon could yet be made, but that full particulars would be forthcoming "at the proper time."

The General Motors is the second consolidation of note which has been effected within the year.  The Northern and Wayne factories were combined a short tiem ago and the E. M. F. Company was formed.  Other concerns were talked of in that connection at the time, but nothing more material developed.  The E. M. F. Company was launched and engaged to produce an output of 12,000 cars, half of which were later turned over to the Studebaker Company by a trade arrangement, the latter in due course absorbing the Garford Company.

The name of nearly every producer of low-priced cars has been mentioned from time to time in connection with similar mergers.  Cadillac, Reo, and Ford have been among them, but there has been onthing more tangible than rumor to identify these various concerns with any of the consolidations.  Henry Ford, on the contrary, with the estimated production of 20,000 cars, has explicitly denied any intention of combining.

The basic idea behind the combination proposals has been the purchase of materials in quantities, effecting a considerable saving in the cost of production, the distribution of the field so as to avoid competition in the production of cars of each given price apportioning to each concern the type which it shall produce, and the limitation of it to that type.