x Abu Dhabi, UAEFriday 21 July 2017

The General covers its tracks

Detroit is deeply entrenched in the culture of the car; one is needed to get just about anywhere, and any trip seems to take at least a half hour.

Detroit is deeply entrenched in the culture of the car; one is needed to get just about anywhere, and any trip seems to take at least a half hour. Most people live in the suburbs surrounding the city, which necessitates driving even further. Perhaps not so surprisingly, General Motors, once the largest car maker in the world but now embroiled in bankruptcy proceedings, is primarily to thank for this. Or, blame, depending on your point of view.

In the 1920s and 1930s, cars were a luxury item in the US; not many people, especially in major cities, could afford them. But they didn't need them - private rail companies blanketed cities with mass transit service via electric trams, offering convenient transportation to millions of urbanites. For a while, these companies owned their own power generators, which produced so much power that excess electricity was sold off to the public. In many cases, the electricity proved so lucrative that the roles were reversed: the power generation became the larger company owning the tram services. The trams ran on cheap, rebated electricity as a result.

But then, a slow shift began to happen. In 1935, a new anti-trust law dictated that power companies couldn't own tram services any more, so the transit firms became independent. For various reasons that included a loss of electricity rebates, they began to struggle financially. Then, a company called National City Lines (NRL) began buying up the smaller rail firms in 45 major cities across the US, including Los Angeles, New York, Philadelphia, Cleveland and, yes, Detroit.

And then, it dismantled them all. Rail lines were replaced with less convenient bus routes. Other tram companies that relied on connections with the now-defunct lines foundered, until the privately-owned rail services disappeared altogether. As it turned out, National City Lines was owned by a conglomeration of companies, led by - you guessed it - General Motors. It, along with Firestone, a few petroleum companies and other firms involved in the conglomeration, were eventually brought to court on conspiracy charges in 1949, but were only found guilty of conspiring to monopolise sales of buses to its companies. They were acquitted of all monopolisation charges surrounding the purchase of the tram lines.

The results of NRL's actions are hotly debated, and there are other factors surrounding the demise of the tram systems, but it can't be questioned that around this time, the culture of the car took hold of America. To help it along, new municipal zoning laws mandated large car parks for city stores and shopping centres. Suburbia was touted as the most desirable address for families. And car sales soared.

As GM faces its darkest days yet, it keeps a brave face and brazenly declares it has an optimistic future. Funny, but there is not a word about its shady past.