Car culture 
How corporate capitalism mopolizes markets  

Monopoly of U.S. Ground Transport
by the "Big 3"

This page addresses how, under the impetus of capitalism, several gigantic corporations came to dominate ground transport in the U.S. during the Twentieth Century. Through sustained efforts of a shared monopoly (or oligopoly) led by General Motors, the automobile-- together with a complex culture supporting it-- was foisted upon the American people, for the sake of private accumulation of capital. As a result, the country is mired in unnecessary car-caused environmental, energy, and social problems.

Note:  Much of the information here is drawn from the monumental, but scarcely available, study by Bradford C. Snell (interviewed on-camera in Taken for a Ride):  "American Ground Transport: A Proposal for Restructuring the Automobile, Truck, Bus, and Rail Industries," presented to the Subcommittee on Antitrust and Monopoly of the United States Senate Committee on the Judiciary, February 26, 1974. Washington, D.C., U.S. Government Printing Office, 104 pp., 1974.

A.  The Auto Culture, with its environmental, energy and social impacts, was virtually imposed on the U.S. by several giant industrial corporations.

Three "automobile" firms, led by General Motors (GM) and joined by Ford and Chrysler, came to dominate all forms of motorized ground transport.

To maximize profits, the "Big 3" substituted automobiles for other, more efficient and environmentally-sound kinds of travel.

B.  By the early 1970s:

• GM dominated the bus and rail locomotive industries, producing 75% of city buses, 100% of passenger locomotives, and 80% of freight engines

• The Big 3 produced 97% of autos,and 84% of trucks

• The Big 3's combined sales hit $50 billion in early 1970s, $200 billion in late 1980s, and $390 billion in 1997--

C.  How did this collective monopoly (or oligopoly) arise? -- And how did it cause the decline of non-car transport in the U.S.?

1.  Forced Growth of Automotive Transport (also see the video Taken For A Ride)

• 1925 -- GM bought Yellow Coach (the biggest U.S. bus-maker)

• 1926 -- GM helped form, then combined with Greyhound Corp.; began replacing intercity rail passenger service with bus service (GM was the largest shareholder in Greyhound until 1948)

• 1932 -- GM began to establish holding companies to create sales for its buses. They would buy electric streetcar firms, convert them to GM motorbus operation, then resell them to local transit companies under contracts prohibiting electric propulsion.

E.g., in 1936 National City Lines (NCL) was formed by GM with Standard Oil of California (now Chevron) and Firestone Rubber Co. They converted electric transit systems in 16 states to GM bus operations, also boosting fuel and tire sales.

By this method the $100 million electric rail system in and around Los Angeles was largely scrapped in favor of buses, and ultimately cars.

• By 1949, GM buses had replaced 100 clean, efficient electric transit systems in 45 American cities. For criminal conspiracy in such replacement, in 1949 a federal court fined GM $5,000 and its treasurer one dollar!

2.  The long-term effect of dieselizing urban transit systems was to sell more autos. Diesel buses are smoky, noisy and slow. They have 28% shorter lives and 40% higher operating costs than electric buses (plus the environmental and energy costs cited above). But GM's revenues were 10 times higher from selling cars instead of buses.

D.  The Railroads, and GM's Role

1.  GM diversified into railroads in 1930, buying out Winton Engine (then the largest engine-maker) and Electro-Motive. They proceeded to shift trains from electric to diesel engines:

• In 1935 electric train engines outnumbered diesel engines 7 to 1

• By 1970 diesels outnumbered electric engines 100 to 1, and GM made 60% of the diesel locomotives

2.  Compared with an electric engine, a diesel one

• cost 3 times more

• did 1/3 the work

• lasted 1/2 as long

3.  So, why the change? -- Profit maximization by GM. GM was the nation's largest shipper from 1935 through 1970. It used its freight business to coerce the railroads to buy GM diesel engines.

4.  The result: Dieselization impaired trains ability to compete with cars and trucks for both passengers and freight. This left the U.S. with a third-rate railway system. But again, GM sales were larger, by 25 to 35 times, if could sell cars and trucks instead of train locomotives.  So private profits prevailed at great expense to the public and the environment.

E.  Conclusion:  We in the U.S. now are locked into an environmentally disastrous and unsustainable Auto Culture, largely as a result of corporate capitalism.

1.  A Piece of Larger Puzzles-- consider how the Auto Culture is tied to many other environmental stresses-- for instance, acid rain, oil spills, or global warming

2.  Solutions?

• Internalize all real costs in pricing car travel (= $5-6 per gal., says Miller).

• Develop sound alternative modes of transport, esp. mass transit.

• Shift to alternative fuels (e.g., hydrogen, wind-generated electricity)

• Re-centralize settlement, reducing need to travel

• Reduce physical travel through "virtual travel" and electronic communications

• Socialize and de-corporatize major transportation systems

• What else can you think of?

In the tough old days...

  Optional resources concerning control of U.S. ground transportation by the "Big 3"

  An apologist view of GM, attempting to absolve the company: "General Motors and the Demise of Streetcars," by Cliff Slater appeared in Transportation Quarterly, Vol. 51., No. 3, Summer 1997, p. 45-66.

  "What's Good for General Motors...; The oil industry and destruction of public transport," by Jim Motavalli, E-Magazine, March 1997

 "Ford and GM Scrutinized for Alleged Nazi Collaboration," Michael Dobbs, Washington Post, 30 November 1998 -- "When American GIs invaded Europe in June 1944, they did so in jeeps, trucks and tanks manufactured by the Big Three motor companies in one of the largest crash militarization programs ever undertaken. It came as an unpleasant surprise to discover that the enemy was also driving trucks manufactured by Ford and Opel-- a 100 percent GM-owned subsidiary-- and flying Opel-built warplanes. Documents show that the parent companies followed a conscious strategy of continuing to do business with the Nazi regime, rather than divest themselves of their German assets. Less than three weeks after the Nazi occupation of Czechoslovakia in March 1939, GM Chairman Alfred P. Sloan defended this strategy as sound business practice, given the fact that the company's German operations were 'highly profitable.'"

  GM's and Ford's Contributions to Nazi War Efforts, Corporate Watch

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Thomas Detwyler maintains this page (tdetwyle@uwsp.edu)
Last updated 4 January 2001

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