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How did there get to be a ‘Big 3’?

Workers at a Ford plant assemble a Model T. Library of Congress

Automakers are in the news, especially with the United Auto Workers union on strike against General Motors, Ford and Stellantis, the parent company of Chrysler.

In stories, they’re sometimes referred to as the “Big Three” or “Detroit Three,” because for decades GM, Ford and Chrysler were far and away the largest American carmakers. But with the formation of Stellantis in 2021, Chrysler’s brands — Dodge, Chrysler, Ram and Jeep — became part of a multinational conglomerate that makes vehicles under 16 brand names, including Fiat, Alfa Romeo, Puegot, Opel and Maserati.

The dominance of American automakers has faded as more brands emerge, with Stellantis, GM and Ford ranking fourth, fifth and sixth in vehicle sales globally in 2022.

Nevertheless, GM is the sales leader in the United States, though in 2021, Toyota edged it out for the top slot. And a vehicle from each company makes up the top three bestselling passenger vehicles in the United States in 2022.

According to figures compiled by Car and Driver, the Ford F-series pickup truck sold more than 650,000 units last year, the Chevrolet Silverado sold more than 513,000, and the Ram pickup sold more than 468,000.

Clearly, whether they’re the Big Three anymore or not, they are hugely important to the nation, both economically and culturally. How did that come to be, and how did just three automakers emerge on top?

Henry Ford stands with the first vehicle he produced, a quadricycle built in 1896, and the 10 millionth Model T built by Ford Motor Company. Library of Congress
Path to the Big Three

In the early days of the automobile, particularly in the last decade of the 19th century and first few decades of the 20th century, there were dozens, perhaps even hundreds of car companies. Many produced a few vehicles, and many didn’t even get that far.

Even some soon-to-be famous names had a difficult time. Henry Ford built his first automobile in 1896, and three years later started the Detroit Automobile Company.

That company lasted about two years and made only 20 vehicles before failing and being reorganized as the Henry Ford Company, which itself would fail within a year.

Henry Ford left that company to found the Ford Motor Company in 1903. When that happened, the assets of the Henry Ford Company were bought up, and the company was again reorganized, this time as another company that would go on to have a long and storied history: Cadillac.

Ford continued tinkering with his design, as well as his production methods, and in 1908 introduced the first truly iconic American automobile: the Model T. Ford would sell nearly 15 million over nearly 20 years on the market.

In the same year Ford launched the Model T, General Motors was formed. Charles Durant, a businessman who already owned Buick, formed GM with a partner and went on a buying spree.

GM acquired Oldsmobile, as well as Cadillac and the companies that would become both Pontiac and GMC in the decades ahead. In 1909, GM tried to buy Ford, but came up short.

The next year, as a result of financial troubles caused in part by so many acquisitions, the companies board of directors fired Durant. In 1911, he would found Chevrolet, and it became so successful that by 1917 he was able to buy a controlling stake in GM.

In 1920, Durant was forced out once again, this time for good. His successor was Alfred P. Sloan Jr., who decided that Henry Ford’s idea of one model produced for years was the wrong plan.

Instead, he introduced annual styling changes, which boosted customers’ desire for a new vehicle. He also introduced the ideas of tiered brands, with Chevrolet as an entry-level brand, Pontiac a step above that, Oldsmobile a bit above Pontiac, Buick a little higher still and Cadillac at the top of the range.

An early Oldsmobile, one of General Motors' first brands. Library of Congress

The last of the Big Three to be founded was Chrysler, founded by namesake Walter P. Chrysler in 1925. Chrysler had been president of Buick from 1916 until 1920 and after his resignation from Buick and GM, he took jobs as an executive at other automakers, including Maxwell, an early car company that was struggling with debt.

In 1924, he launched the first Chrysler, and the next year the Chrysler Corporation was formed. By the 1930s, Chrysler had found a strategy similar to GM, forming Plymouth as a low-price brand, DeSoto as a midlevel brand and eventually acquiring Dodge as another midpriced brand.

The end of independent automakers

While there were once hundreds of U.S.-based automakers, the Great Depression led to the failure of nearly all of them. Along with GM, Ford and Chrysler, only a half dozen or so makers survived.

Packard was an early automaker and would keep making cars until the 1950s, when it merged with Studebaker before ultimately disappearing. Library of Congress

Hudson, Crosley, Studebaker, Packard, Nash-Kelvinator and Willys-Overland emerged from the Depression and survived until World War II, when all civilian automobile production was shut down. A new independent maker would form at the end of the war, Kaiser-Frazer, but it would have a short, rocky tenure before merging with Willys-Overland and, eventually focusing on Jeep production using a design developed by American Bantam, headquartered in Butler.

In many ways, it was the dominance of the Big Three that doomed at least some of the independent makers in the years following World War II.

In the mid-1950s, the three companies accounted for 94% of all automobile sales in the United States, according to James M. Rubenstein in his book “Making and Selling Cars.”

That left precious little revenue for the independent companies to share between them. Crosley was the first to close, shutting down production in 1952. In 1953, Kaiser-Frazer, which had only started production in 1947, merged with Willy-Overland.

The next year, 1954, saw more mergers. Hudson and Nash-Kelvinator merged to form American Motors Company and Studebaker and Packard merged to form Studebaker-Packard.

The Packard name would be dropped from the company just a few years later, and the company would stop making cars in 1966.

AMC would find some success over the next 25 or so years. In 1970, it would buy Kaiser-Jeep, the successor to the merger between Kaiser-Frazer and Willy-Overland.

Despite that, and despite strong sales into the late 1970s, AMC’s dropping market share and financial woes saw a 59% stake sold to French automaker Renault in 1980. In 1987, Chrysler bought AMC, bringing an end to the age of independent automakers in the United States.

Jeeps line up to drive through trails at Coopers Lake Campground in 2023. The Jeep brand has passed through multiple owners since the 1940s, and is currently owned by Chrylser parent company Stellantis. Shane Potter/Butler Eagle
Ups and downs

The independent makers weren’t the only ones that took a hit in the 1950s. Several brands owned by the Big Three, including Chrysler’s DeSoto and Ford’s Edsel, were shuttered by the end of the decade.

While the 1950s and 1960s saw an explosion of creativity and a proliferation of models from American companies, the following decades were full of challenges.

Twin fuel crises in the 1970s, the result of embargoes from OPEC members, drove demand for small, fuel-efficient vehicles, something that caught Detroit flat-footed at a time when many of its cars were powered by gas-thirsty V-8 engines.

But carmakers in Europe and Japan had long made small, fuel-efficient vehicles, and by the 1960s, some of those, including the Volkswagen Beetle, were selling in decent numbers.

Ads like this one, which ran in the Eagle in 1969, helped to convince Americans to try small, foreign cars.

By 1970, German and Japanese carmakers were combining to sell about 1 million cars in the United States, with 750,000 German-made cars and 313,000 Japanese-made cars sold, compared to about 7 million American-made cars sold that year. In 1980, after both of the 1970s energy crises, American automakers sold about 6.6 million cars, while all import car sales had grown from 1.2 million in 1970 to 2.4 million in 1980.

The most telling change is the breakdown of where those cars were made. German imports totaled 292,000 in 1980, while cars brought in from Japan accounted for nearly 1.9 million of the 2.4 million imported cars sold that year.

As the smallest of the Big Three, Chrysler had perhaps the most difficult time of the three in the 1970s. In 1979, Lee Iocacca negotiated a deal with the U.S. government that saved the company from bankruptcy.

He followed that up with the introduction of the K-car, a front-wheel drive platform that could be outfitted with different body styles to cut down on production costs, and the Dodge Caravan and Plymouth Voyager minivans.

That was one of many changes in car types that would come in the following years, particularly the rise of the SUV.

In 1990 there were 8 million new passenger cars and 4 million light trucks sold, but by 2000, things had drawn nearly even, with 6.2 million new passenger cars and 5.8 million new light trucks sold. By 2022, there were 2.4 million new passenger car sales and more than 9.2 million light trucks sold.

Economic slumps continued to occasionally shut down a car brand, even one owned by the Big Three.

Plymouth, which Walter P. Chrysler had launched as a lower-cost companion to the Chrysler brand, closed in 2001, and Oldsmobile, which had been acquired early in the history of GM, produced its last car in 2004.

The 2008 subprime mortgage crisis and subsequent recession hit U.S. automakers particularly hard. Both GM and Chrysler went into Chapter 11 bankruptcy in 2009 and emerged changed companies. Chrysler sold a partial stake to Italian automaker Fiat, becoming Fiat Chrysler America.

New vehicles are shown parked in storage lots near the the Stellantis Detroit Assembly Complex in Detroit, Wednesday, Oct. 5, 2022. In 2021, Fiat Chrysler America merged with other carmakers to form Stellantis, now the world’s fourth-largest car company. AP Photo

GM sold off or closed multiple brands, including Pontiac, Hummer and Saturn.

What’s next?

In the years since then, perhaps the biggest turmoil has surrounded the transition away from gasoline-powered, internal combustion engines and to vehicles powered by hybrid-electric, plug-in hybrid and fully electric drivetrains.

The first hybrid cars in the United States, the Honda Insight and Toyota Prius, were introduced for the 2000 and 2001 model years, respectively.

That first year, fewer than 10,000 Insights were sold in the United States, and in 2001 the two models combined for hybrid sales of 20,282. In 2005, total hybrid vehicle sales hit more than 205,000, and two years later topped 350,000.

Mass-market electric vehicles started to become available in the 2010s, with sales just barely topping 10,000 in 2011. Two years later, that had nearly hit 50,000 sales. In 2017, electric vehicle sales crossed the 100,000 mark, with 104,487 sold, based on Bureau of Transportation statistics.

That nearly doubled, to 207,062 in 2018 and in 2021 was nearly 460,000.

Hybrid sales, likewise, have continued to grow, with nearly 800,000 in 2021, with that number rising to more than 950,000 when including plug-in hybrids.

A Tesla electric vehicle is charged on Wednesday, May 10, 2023, in Westlake, Calif. Electric vehicle sales are increasing, from both independent brands like Tesla and larger automakers like General Motors, Ford and Stellantis, the parent company of Chrysler. AP Photo

And while the companies were all relatively slow to embrace hybrid technology at first, all three boast about their current hybrid and EV lineups. Chevrolet pitches its Bolt EV as the least expensive new EV for sale in the country, while Dodge has positioned its Hornet plug-in hybrid as a performance vehicle in electric clothing.

Ford has launched both the Mustang Mach-E, a performance electric hybrid crossover, and the F-150 Lightning, an electric pickup that offers the ability to power some home appliances in case of a power outage, among other tricks.

The days of 6 million cars sold and a 94% share of the U.S. market are over, but GM, Ford and Stellantis are still leading sellers in the U.S.

In 2022, for example, GM sold nearly 2.3 million vehicles in the United States, outselling Toyota, which sold 2.1 million. Ford was third with 1.8 million sales and Stellantis sold nearly 1.6 million vehicles.

Globally, the picture is somewhat different. Toyota was the global leader in 2022 with 9.6 million sales worldwide, VW had 8.3 million sales and Hyundai Kia had 6.8 million sales.

Stellantis ranks fourth with 6 million sales in 2022, GM is fifth, with 5.9 million sales and Ford sixth, with 4.2 million sales.

More competition is likely coming for the companies once known as the Big Three. Startup companies like Tesla have seen sales explode, going from 13th most U.S. sales in 2021, with about 300,000, to ninth place in 2022, with more than 500,000 sales.

Chinese automakers could soon be competition, also, with companies like Changan and Geely selling 2.3 million and 1.4 million cars, respectively, worldwide in 2022.

No matter the ultimate outcome, though, one thing is certain. The U.S. auto industry has gone through a tremendous amount of change in the past 125 years, and while no longer as large as it was, it has remained a global force.

More in America 250

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