General Motors and the Red Car

[Agemegos]

G’day

In a classic column, Cecil dismissed the claim that General Motors had destroyed the Los Angeles public transit system.

What, then, is the origin of claims such as this one:

“By 1949, General Motors had been involved in the replacement of more than 100 electric transit systems with GM buses in 45 cities including New York, Philadelphia, Baltimore, St. Louis, Oakland, Salt Lake City, and Los Angeles. In April of that year, a Chicago Federal jury convicted GM of having criminally conspired with Standard Oil of California, Firestone Tire and others to replace electric transportation with gas- or diesel-powered buses and to monopolize the sale of buses and related products to local transportation companies throughout the country. The court imposed a sanction of $5,000 on GM.”

I have seen similar accounts in supposedly-reputable journals, such as The Economist.

Regards,
Agemegos

[Sage_Rat]

Just my reading, but Cecil’s article seems to mostly be saying “It was going to happen anyway because electric was too expensive and in-the-way.” He never says that GM didn’t like this happening, just that they weren’t the cause of it.

Your article is simply saying that once the switch-over began to happen, GM used its ties to force it so that when busses were bought they were GM busses. Thereby misusing their monopoly.

To give a parallel example: The king of country A needs coal, both company Alpha and Beta sell coal. Alpha (who has 90% of the coal market) plays unfair and fiddles things around so A can only buy from Alpha. Beta takes Alpha to court and they are convicted for misuse of a monopoly.

That Alpha was convicted of a crime in relation to selling coal is entirely unrelated to coutnry A originally needing coal. They did not cause that to happen, they just stepped in once the demand already existed.

[Agemegos]

@Sage Rat

Just my reading, but Cecil’s article seems to mostly be saying “It was going to happen anyway because electric was too expensive and in-the-way.” He never says that GM didn’t like this happening, just that they weren’t the cause of it.

Your article is simply saying that once the switch-over began to happen, GM used its ties to force it so that when busses were bought they were GM busses. Thereby misusing their monopoly.

Is that the story? My reading ws that a consortium consisting of GM, Firestone, and Standard Oil bought the transit companies, exported the rolling stock to Spain and South American, tore up the rails, and replaced the services with diesel buses.

[Agemegos]

http://rapidtransit.com/net/thirdrail/9905/agt3.htm

@The Third Rail

When, in the 1920’s, the nation’s auto market seemed to be approaching saturation, GM diversified into the mass transit market, producing city and intercity buses. Thus GM first moved toward the potential of spanning all phases of surface transportation.
“After its successful experience with intercity buses, General Motors diversified into city bus and rail operations. At first, its procedure consisted of directly acquiring and scrapping local electric transit systems in favor of GM buses. In this fashion, it created a market for its city buses. On June 29, 1932, the GM-bus executive committee formally resolved that ‘to develop motorized transportation, our company should initiate a program of this nature and authorize the incorporation of a holding company with a capital of $300,000.’ Thus was formed United Cities Motor Transit (UCMT) as a subsidiary of GM’s bus division. Its sole function was to acquire electric street-car companies, convert them to GM motorbus operation, and then resell the properties to local concerns which agreed to purchase GM bus replacements. ‘In each case,’ [GM General Counsel] Hogan stated, GM 'successfully motorized the city, turned the management over to other interests and liquidated its investment.’ The program ceased, however, in 1935 when GM was censured by the American Transit Association (ATA) for its self-serving role, as a bus manufacturer, in apparently attempting to motorize Portland’s electric streetcar system.”
"Smaller companies proved only a beginning, however, as GM influence extended to the nation’s largest cities: “The massive conversion within a period of only 18 months of the New York system, then the world’s largest streetcar network, has been recognized subsequently as the turning point in the electric railway industry.”
In 1936, GM caused its officers and employees to form National City Lines, Inc. (NCL) the report alleges, and continues: “During the following 14 years General Motors, together with Standard Oil of California, Firestone Tire, and two other suppliers of bus-related products, contributed more than $9 million to this holding company for the purpose of converting electric transit systems in 16 states to GM bus operations. The method of operation was basically the same as that which GM employed successfully in its United Cities Motor Transit program: acquisition, motorization, resale. By having NCL resell the properties after conversion was completed, GM and its allied companies were assured that this capital was continuously reinvested in the motorization of additional systems.

[Sage_Rat]

1. According to Cecil, the switchover began in 1917; that is 15 years (3/4 of a generation) before the earliest date in your cites.

2. As of the 1930’s, per all known information, GM was able to buy out large chunks of the electric transportation system. This a few years into the great depression when buying automobiles by the dozen wasn’t a big past-time of the very grand majority. So either during the 1920’s GM had been stockpiling bucks by the barrel to do this, or in the 1930’s railway outfits were running a failing market and could be bought uber-cheap. The latter strikes me as more probable.

[samclem]

Welcome to the boards, Agemegos. And thanks for linking to Cecil’s column, not something that most people remember to do. We appreciate it.

Since this IS about a column of Cecil’s, let’s move it to Comments on Cecil’s Columns.

samclem General Questions moderator

[samclem]

And now that I’ve moved it, I’ll offer you a scholarly article which comes to an opposite conclusion… Roger Rabbit Unframed

It’s plainly outlined in the 1988 movie Who Framed Roger Rabbit?: the evil auto giant, General Motors, bought up the beloved Los Angeles transit company, …The theory had already been given the imprimatur of a congressional committee in 1974, when the U.S. Senate Subcommittee on Antitrust and Monopoly included a report by government attorney Bradford Snell purporting to document the Roger Rabbit scenario with hard facts and figures.
…But like most conspiracy theories, the facts are a little different, and Lyn Long, a research specialist at UC Irvine’s Institute of Transportation Studies and a member of the Transportation Research Board’s transportation history committee, has set out to correct the record.

[Agemegos]

@samclem

And now that I’ve moved it, I’ll offer you a scholarly article which comes to an opposite conclusion… Roger Rabbit Unframed

Okay. According to that site teh conviction was in 1947, not 1949, and the charge was criminally monopolising the market for bus rather than criminally conspiring to destroy expand the bus market at teh expense of the tram market.

In face of these competing assertions it would be nice to see some primary evidence, such as court records. What’s the stright dope?