The leaded gasoline didn’t just give GM the ability to build vehicles with higherperforming engines it gave them a unique process that they could patent. GMcombined their process with similar processes being tested by DuPont Chemicals and Standard Oil, which gave GM three cents on every gallon of leadedgasoline sold anywhere in the world. They quickly determined that their shareof profits in the sale of leaded gasoline would be worth many billions of dollarsover the next decades.The significance of understanding what this meant to General Motors is not justcalculated by profits earned, more importantly, it explains why General Motors– the world’s largest company and automaker - would come to have no interestin developing vehicles that could get better mileage per gallon of gasoline. It isessentially the same reason why tobacco companies had no desire to lessenthe addictive qualities of cigarette smoking. The more gallons of fuel that a vehicle used translated to more profits to GM. In essence, the vehicles could beused as a loss-leader to stimulate gasoline sales.This new stream of nearly incalculable profits meant that they didn’t have toreally compete on an even playing field with other auto manufacturers:• They could undercut competitions’ products because they didn’t need to makeprofits from their vehicles, thereby driving the competition into bankruptcy.• They could accept worker demands that they knew the other car companieswould not be able to live with on a long-term basis.• Moreover, even if they didn’t undercut the price of their competition or permitunrealistic employee compensation packages, the added revenue gave them amarketing war-chest that could not be overcome – also ultimately helping todrive a long list of car makers into obscurity.Any of the above could have given GM a huge edge over the competition, buttogether it was impossible for most competitors to withstand.
It seems that your browser's pop-up blocker has prevented us from opening a new window/tab. Please click the button below to open the link manually.
