The Story of 2 Big Banks and 1 Giant Automaker
On this day in economic and financial history ...
The North American banking industry is host to some of the continent's longest-lived companies, and one of the oldest first opened its doors on Nov. 3, 1817. The Bank of Montreal (NYS: BMO) began operating at 10 in the morning on that day. It was Canada's first bank, founded with initial assets of 250,000 British pounds sterling, or close to $30 million in inflation-adjusted American dollars. Within four decades, it would solidify its position as the largest financial institution in Canada, and it would grow to be third-largest bank in North America.
The Bank of Montreal has slipped somewhat in stature in recent years, as it's currently only the fourth-largest lender in Canada. However, at the start of 2012, it was the 34th-largest bank in the world by market cap, and was ranked the 22nd-strongest bank in the world in Bloomberg Markets' 2012 annual report. The Bank of Montreal also holds one of the longest-lived dividend payment streaks on U.S. exchanges, with an uninterrupted record that stretches back to 1829.
What's in a name?
The Bank of Montreal isn't the only major financial institution with a Nov. 3 milestone. The Bank of Italy needed a new identity after merging with the Bank of America, Los Angeles, in 1928, and on Nov. 3, 1930, Bank of Italy founder Amadeo Gianni unveiled its modern name: Bank of America (NYS: BAC) .
At the time, the "brand-new" Bank of America was already the largest banking institution in the United States, with 438 banks scattered across the state of California. Its total assets were $1.25 billion, or about $17.3 billion when adjusted for inflation. Those numbers have grown by leaps and bounds, prompting the Dow Jones Industrial Average (INDEX: ^DJI) to add Bank of America in 2008, when it was at its largest size. Today, after a bit of shrinkage, Bank of America operates nearly 5,900 branches and more than 16,000 ATMs across the United States, with a total asset base of $2.2 trillion, of which approximately $1 trillion is customer deposits.
Baseball, hot dogs, apple pie, and ...
On Nov. 3, 1911, the Chevrolet Motor Car Company was incorporated, unofficially beginning one of America's longest-running corporate rivalries. At the time, it was just one of 270 car companies in the United States, most of which were fighting an uphill battle against industry leader Ford (NYS: F) and its mass-produced Model Ts, which had been rolling off the assembly line since 1908.
Chevrolet's total production was only 6,000 cars two years later, but by 1914, the company began offering cars for less than $900, bringing it into competition with the Model T. By 1917, Chevrolet sold 125,000 cars, largely on the back of a newer model with a $490 price tag named, quite bluntly, the "490."
Chevrolet became a subsidiary of General Motors (NYS: GM) in 1918, at which point the combined company's market cap was about $200 million. Seven years later, the new Chevy-enhanced GM joined the Dow, a position it held until 2009. GM was the world's largest automaker by sales for nearly its entire stay on the Dow, from 1931 to 2007. It reclaimed the top spot in 2011 after a successful post-bankruptcy restructuring.
General Motors has a long way to go to overcome its bailout burdens, but Ford's in the same boat. The Model T pioneer still owes the government nearly $6 billion, which now needs to be paid off after a multiyear grace period. Can Ford sustain debt payments, pension contributions, and a recently instituted dividend? The Fool's top industrial analysts have devoted themselves to answering these (and other) questions for subscribers to the Fool's new premium research service. If you're wondering whether Ford can maintain its mojo, subscribe today and you'll get a full year of exclusive in-depth access to important news and analysis. Click here to get started now.
The article The Story of 2 Big Banks and 1 Giant Automaker originally appeared on Fool.com.Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter, @TMFBiggles, for more news and insights. The Motley Fool owns shares of Bank of America and Ford. Motley Fool newsletter services have recommended buying shares of Ford and General Motors and creating a synthetic long position in Ford. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.
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