By the early 1920s Vauxhall were an established and well respected producer of quality cars in a similar vein to Sunbeam and Humber, although they lagged behind in some areas such as using side valves instead of overhead and front and not all wheel braking. However, Vauxhall were like their competitors in that they all suffered from a common, and fundamental, problem; the low productivity which prevented price competition with producers such as Morris, Austin and Ford, which had massively intensified in the early 1920s. An attempt to remedy this was made by Vauxhall early in the decade by reorganising the Luton factory in a half-baked attempt at an assembly line but only for the fitting of engines and chassis ancillaries. Despite this, production was still hopelessly slow compared to the full mass production techniques used by the largest producers such as Ford and Austin. In 1925 Leslie Walton, Company Chairman, stated that Vauxhall was not equipped, trained or had any desire to produce large quantities of mass produced cars and would continue the policy to produce a “reasonable” number of high class cars at a “moderate” price. In any event Vauxhall did not have the capital available at the time to make the huge investment that mass production would have involved. The prospect was also looming in 1925 of the redemption of £300,000 Short Term Notes taken out in 1920 to keep Vauxhall afloat and, in addition to large bank overdrafts, meant the financial standing of the Company was beginning to crumble. Walton called a special shareholders meeting where he stated that the improvement in profitability for the previous two years was not enough to reduce the overdrafts or set aside funds for payment of the Short Term Notes. The company was backed into a corner and as a result it was proposed to create and issue First Mortgage Debenture Stock for the sum of £350,000, this effectively meant mortgaging all of Vauxhall’s fixed capital and assets. The shareholders had already seen the capital reduced from £600,000 to £300,000 by writing off 10/- shillings on each share in 1923 and none had received a dividend since 1919. However, the shareholders had no real choice because if they failed to accept the offer Vauxhall Motors Ltd would go into liquidation. Meanwhile, General Motors Overseas Operations (GMOO) had felt sufficiently confident in the British car market that it had set up an assembly plant in 1920 at Hendon Aerodrome to build cars from imported CKD (Completely Knocked Down) kits from the US, these included Buicks, Cadillacs, Chevrolets, La Salles and Oaklands. CKDs were used because a lower import tax was levied compared to importing complete vehicles giving GM an advantage over other imports. The operation did suffer from the same round of competitor price cuts of 1921 and the growth in low price models from Morris, Ford and Austin cut GM sales. In 1924 a survey was conducted by GMOO head James Mooney and clearly pointed to the tax on engine size, insurance and servicing costs placed the cheapest Chevrolet at a £112 disadvantage compared with the equivalent Austin, not much in today’s money but a huge difference at the time.

This was the incentive for General Motors to give the go ahead to GMOO to seek the acquisition of a British manufacturer, in the meantime the Hendon plant was turned over to the production of Chevrolet trucks with locally built bodies, and it was this vehicle that was later to form the basis of the first British built Bedford truck.

After assessing all their requirements GMOO chose Austin as being the ideal operation to take over. Negotiations started in 1924 and were initially favourable, Herbert Austin was amenable as his company was having difficulties in raising capital for its own expansion plans but there was always the backdrop of criticism from the national and motoring press which resented the prospect of well-known British companies passing into American hands. After months of deliberations in early October 1925 the plan was scotched by dissenting Austin directors who opted for a more modest expansion plan rather than relent to American ownership.

Wasting no time, on 21 October 1925 negotiations started with Vauxhall Motors Ltd. The issue of the First Mortgage Debenture Stock for the sum of £350,000 at 7% had not been very successful and the Vauxhall Board was more than willing to entertain GMOO’s offer of $2,575,291 for the purchase of the ordinary shares. This enabled the 300,000 ordinary shares to return to their pre 1923 value of £1 each, former shareholders also had the option of purchasing up to 300,000 preference shares at £1 each with a guaranteed dividend of 6%. Old ordinary shareholders were paid a bonus of £210,000 which combined with the above made a total of £510,000 invested in Vauxhall. The deal was agreed in principle within days of talks starting and was completed in full on 24 November 1925, through Morgan Grenfell, GM’s Merchant Bankers, who had also dealt with the Austin proposal.

A new 7-man board of directors was appointed on 16 November 1925; 4 British - Leslie Walton remained as Chairman and joint Managing Director, Percy Kidner as joint Managing Director, and Board Directors Mr Bisgood and Mr Petch; 3 American Directors were appointed – James Mooney, also head of GMOO, Edward Riley assigned from the GMOO Hendon operation and Alfred Swayne from GMOO headquarters in Detroit. Within General Motors in the US the deal received a less than favourable reception and vociferous disagreements over Vauxhall continued until 1928, major policy decisions were delayed by Alfred Sloan, GM President, who wanted to move cautiously until a clear policy had been worked out for all overseas operations. This caution did not stop GM trying to purchase Morris Motors Ltd for $11 million in 1926, but again they were rejected, and then to compound matters GM entered into an auction with William Morris and Herbert Austin for the bankrupt Wolseley Motor Company: Morris won that battle.

There were plenty of GM insiders who thought that a manufacturing presence in Europe was not needed at all but an added complication was the acquisition of Adam Opel in Germany on 30 March 1929. The strategy was the two companies would both compete with each other in the same way that GM divisions worked in the US but Opel would be the base for European manufacturing and Vauxhall for Britain and the Empire which at the time covered 38% of the world. Unfortunately, financial losses at Vauxhall for 1927, 1928 and 1929 did not help Vauxhall’s case but the depression that followed the Wall Street Crash and foreign countries putting up heavy import tariffs gave General Motors an advantage with Opel and particularly with Vauxhall and their Empire territories.

What was to have a profound effect on Vauxhall was the attitude of the press towards the Company after the takeover by GM. Most vociferous was Edmund Dangerfield the editor of “The Motor”, his attacks resulted in a double page advertisement in the magazine entitled “The future of Vauxhall Motors” which emphasised that it would remain a 100% British institution and the Managing Director, Chairman, staff, workmanship and product were British. Significantly it was only signed by Walton and Kidner. This did not stop the criticism and Vauxhall ended up withdrawing all advertising and loan of test cars for nearly two years. This atmosphere also dictated that the GM connection was not mentioned in any Vauxhall advertising and sales promotion for several years.

GM felt it was wise under these circumstances to have British nationals as the main company figureheads but despite this Mooney was anxious to have a senior GMOO man “on site” to this end he appointed Bob Evans as joint Managing Director with Kidner while Walton remained as Chairman. This proved a disaster and Kidner resigned in 1928 leaving GM in the rather unenviable position of having an American in the MDs chair.

Once the decision had been made for Vauxhall’s expansion Sloan personally told Mooney to pick an Englishman to run Vauxhall, the choice was an inspired one, Charles Bartlett was MD of the GMOO Hendon operation and was quintessentially British and so in 1929 he was appointed sole MD of Vauxhall.