In Depth

DuPont’s link with General Motors began with Pierre S. du Pont, who bought GM stock in 1914 and watched wartime demand increase its value sevenfold in a year. Despite high profits, though, GM suffered from divided management. In 1915 Pierre was elected a GM director, then board chairman, to help solve that problem, but America’s entry into World War I in 1917 left him little time. After the war GM executive and former DuPont treasurer, John J. Raskob, persuaded DuPont’s directors to invest $25 million in GM. Raskob saw a sure market for DuPont’s artificial leather, plastics and paints; plus the investment would also yield reliable returns. Pierre became GM’s president in 1920, his brother Irénée succeeding him at DuPont. By then DuPont’s GM holdings had doubled, accounting for a third of all GM stock. In 1929 GM stock provided half of DuPont’s total earnings. During the 1920s DuPont and GM developed new refrigerants (GM owned Frigidaire) and antiknock gasoline additives, and DuPont’s Engineering Department helped GM build plants and workers’ housing. Most significantly, however, DuPont adopted the bold restructuring plan that Pierre and Alfred P. Sloan, Jr. successfully implemented at GM. The close relationship between the two companies eventually attracted the attention of federal antitrust prosecutors, who filed suit in 1949. Eight years later the U.S. Supreme Court ruled against DuPont, and in 1961 the company finalized the disposal of its GM shares.