Think a recession is a bad time to start a company? Imagine if the founders of these major corporations had thought the same...
4. Smooth riding through a panic
Company: General Motors
Industry: Automobiles
Founded during: The Panic of 1907
Picture: The first Buick of 1903.
Back in the days of President Theodore Roosevelt, before a central bank had been established, lending institutions were dependent on their own currency resources. This became a problem in 1907 when numerous large banks made a bid for controlling shares of United Copper Company. When the attempt failed, the public pulled
their money from the banks, causing runs that led to the failure of many trusts and lending institutions. These events didn't deter William Durant, a leading manufacturer of horse-drawn vehicles, from trying his luck on a new technology called the automobile. He founded GM on Sept. 16, 1908 in Flint, Mich. That year, it became a holding company for Buick and Oldsmobile, which had been established several years. Historians consider the Panic of 1907, also known as the Banker's Panic, to have ended in June 1908, even though the market didn't reach pre-1907 levels until 1909. That was perfectly timed for GM, which went on to acquire many more companies in that rebound year.
Status today: Hit with a double whammy in 2008 from sky-high fuel prices and a terrible market, GM has seen its stock price fall 85% in a year. Its competitors aren't faring much better - in December, GM went to Washington with Chrysler and Ford to seek $34 billion in government loans. The company is currently under scrutiny: Iit must prove it can cut costs enough to be a viable recipient of the billions it needs to stave off bankruptcy.
Courtesy: cnnmoney.com
4. Smooth riding through a panic
Company: General Motors
Industry: Automobiles
Founded during: The Panic of 1907
Picture: The first Buick of 1903.
Back in the days of President Theodore Roosevelt, before a central bank had been established, lending institutions were dependent on their own currency resources. This became a problem in 1907 when numerous large banks made a bid for controlling shares of United Copper Company. When the attempt failed, the public pulled
their money from the banks, causing runs that led to the failure of many trusts and lending institutions. These events didn't deter William Durant, a leading manufacturer of horse-drawn vehicles, from trying his luck on a new technology called the automobile. He founded GM on Sept. 16, 1908 in Flint, Mich. That year, it became a holding company for Buick and Oldsmobile, which had been established several years. Historians consider the Panic of 1907, also known as the Banker's Panic, to have ended in June 1908, even though the market didn't reach pre-1907 levels until 1909. That was perfectly timed for GM, which went on to acquire many more companies in that rebound year. Status today: Hit with a double whammy in 2008 from sky-high fuel prices and a terrible market, GM has seen its stock price fall 85% in a year. Its competitors aren't faring much better - in December, GM went to Washington with Chrysler and Ford to seek $34 billion in government loans. The company is currently under scrutiny: Iit must prove it can cut costs enough to be a viable recipient of the billions it needs to stave off bankruptcy.
Courtesy: cnnmoney.com
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