The Road to General Motors of Canada
(Mid 1800 – 1918)
In the middle of the 19th century, a young man in Tyrone, Ontario lived on a farm he had cleared using an axe with a handle he had made himself. The farmer’s axe handles brought a good price at the market in Bowmanville, but eventually he wanted to apply his skills to a bigger project. After carefully studying pictures in an old carriage catalogue, he made up his mind to build himself a horse-drawn sleigh.
“One Grade Only And That The Best”
As the farmer worked on his project, a neighbour asked if he could buy the finished sleigh. The farmer offered to make another just like it. He agreed to a delivery date, but the traveling blacksmith to whom he assigned the ironwork arrived late, and the farmer had to work day and night to finish the sleigh and keep his promise. The farmer subsequently added his own blacksmith shop to his farm operation. The business grew into a farm wagon workshop; the farmer, Robert McLaughlin, opened a carriage plant in Oshawa, Ontario, and eventually opened branches across the country. The Company outdid established competitors and earned a reputation for the highest quality.
From Carriages to Motor Cars
One of McLaughlin’s three sons planned to be a chemist; he went to the United States and established the Canada Dry Company. The other two became partners of the McLaughlin Carriage Company.
Around 1901, sons Sam and George went for a ride in the company bookkeeper’s automobile. Immediately hooked, they tried to persuade their father that making a horseless carriage would be a profitable venture, but he remained unconvinced, and Sam and George had to research the matter surreptitiously. In 1905, Sam test-drove several motor cars but quickly decided that the Buick was the car he wanted to make in Oshawa.
He nearly came to a manufacturing agreement with an old friend in the United States –Billy Durant, a partner in the Buick Motor Company–but the deal fell apart over the financial arrangements. Back at home, Sam and George finally got father Robert to agree to a plan to form the McLaughlin Motor Car Company.
Production was about to begin when the engineer fell seriously ill. After some hesitation, Sam sent a telegram to Durant and asked to borrow an engineer. The next day Durant arrived with two Buick executives, the original plans for collaboration were resurrected, and in 1908 the plant turned out 154 cars — called McLaughlins — with Buick engines.
Canadian Cars Earn a Reputation for Quality
Canada was fond of its McLaughlin. After a Buick won the first race at the Indianapolis Speedway in the United States, the McLaughlin’s advertising men wanted to cash in on the elaborate Buick advertising campaign. They persuaded management to change their car’s name from McLaughlin to Buick. When sales declined, the car was rechristened again – this time as the McLaughlin-Buick.
In 1908, Durant had assembled Buick and Oldsmobile into General Motors, but by 1910 he had overreached himself and was ousted from his company by alarmed bankers.
Undaunted, he started a new venture with a former Buick racing driver from Switzerland, Louis Chevrolet. The Chevrolet’s popularity grew so fast that by 1915 Durant’s Chevrolet shares were worth enough that he could regain control of GM.
Durant planned to build a Chevrolet plant in Toronto, and the McLaughlins were worried about competition with the Buick. One day while visiting New York, at lunch with Durant and a Chevrolet stockholder, Sam casually asked how the Canadian project was going. “Why don’t you give it to the McLaughlin Boys, Billy?” piped in the stockholder. “Well, Sam, do you want it?” asked Durant. In two days Durant and the McLaughlins had reached a deal. Robert McLaughlin –still not entirely convinced that the era of horse-drawn carriages was almost over—reluctantly agreed to the sale of his carriage business to make way for production of Chevrolets alongside Buicks at the Oshawa plant. As with the McLaughlin-Buicks, the Canadian- built Chevrolets had special appeal. Their bodies were made to Sam McLaughlin’s designs, and the McLaughlin plant applied a superior finish. On seeing a McLaughlin-Buick left standing outside General Motors’ New York office, a GM executive ordered it sent home: “It’s gathering crowds—and it’s no more like one of our Buicks than a St. Bernard is like a dachshund!”
Family Business Becomes General Motors of Canada
(1918 – Today)
The McLaughlins’ Chevrolets were as much of a success in Canada as Chevrolets were in the United States. By 1918, though, neither George nor Sam had sons interested in carrying on the business. In a five-minute meeting, GM management agreed to buy the McLaughlin business, but on one condition -that the McLaughlins stay to run it. Delighted with the vote of confidence, Sam and George became the first president and vice president of General Motors of Canada. Sam remained president until 1945. When he died in 1972, at the age of 100, he was still chairman of the board. Under his guidance, General Motors of Canada enjoyed tremendous growth and became a major contributor to GM’s total production.
GM of Canada Today
By its 30th anniversary in 1938, GM of Canada had produced a million vehicles. In 1965, Canada and the United States signed the Canada-U.S. Automotive Products Trade Agreement (Autopact). The agreement allowed GM of Canada to increase its production capacity dramatically. More recently, the North American Free Trade Agreement (NAFTA) between the U.S., Canada and Mexico has led to a wide-open automobile trade in North America. Today GM of Canada has the capacity to manufacture more than one million units in a single year –generating significant export earnings by shipping about 90 percent of those vehicles to the United States. It also satisfies a third of Canada’s 1.2 million unit market, the ninth largest automobile market in the world.
In the 1980s, GM of Canada began an $8 billion reindustrialization program. Now, the GM Autoplex in Oshawa is the centrepiece of GM of Canada’s manufacturing operations. It is the largest, most modern, integrated vehicle-manufacturing complex in North America.