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Off the Rocks. Far from restraining G.M., Du Pont was one good reason why G.M. grew; without the stock purchase there would quite likely have been no
General Motors in existence today. When Du Pont took control during the post-World War I depression, the young auto giant was headed for the rocks. Brilliant, mercurial William Crapo Durant, who put the company together, was $80 million in debt and on the verge of bankruptcy. Du Pont had already put $49 million into the company's stock. By risking another $31 million of its capital, Du Pont bailed out Durant and put the company back on course, not only with cash, but also with managerial talent. Du Pont President Pierre S. du Pont, who had been actively interested in G.M. since 1915, stepped in as G.M. president in 1920, set about reorganizing the company. Du Pont was responsible for replacing Durant's old-fashioned one-man rule with a new kind of decentralized management in which the company was broken up into divisions and the division bosses got real autonomy, were encouraged to compete with each other, buy supplies from whom they pleased. By its very nature the management concept imposed by Du Pont worked against the kind of control charged by the Government.
As G.M. has grown stronger over the years, Du Pont has steadily loosened its ties to the automaker. In recent years Du Pont's role has been largely confined to helping set overall policy, chiefly financial. Only six of G.M.'s 33 directors are usually identifiable as being in the Du Pont faction—Donaldson Brown, Du Pont treasurer until he switched to G.M. in 1921, Lammot du Pont Copeland, Emile F. du Pont, Henry B. du Pont, Chairman Albert Bradley, Executive Vice President Frederic G. Donner. As in many another company, there have often been arguments between the financial men in Manhattan and the automakers in Detroit. But did Detroit knuckle under? Says one former General Motors boss, Defense Secretary Charles E. Wilson: "Du Pont never exerted any pressure on me.
I don't take pressure very well from anyone."
Last week's decision of the Supreme Court will not cripple G.M. nor will it knock a dent in Du Pont's business. G.M. will probably keep right on buying from Du Pont so long as the price and product are right. What will hurt is the order to get rid of stock that pays a handsome $126 million annually in dividends. Through Christiana Securities Co., Delaware Realty & Investment Co. and individual stockholdings, the Du Pont family owns 28% of Du Pont itself, and in turn some 18 million shares of General Motors stock worth $756 million. Yet while the trustbusters want Du Pont to sell its G.M. stock, they have never spelled out how it should be done. Neither has the court suggested how Du Pont might divest itself of all or part of its holdings. Some possibilities: