The Fable of Fisher Body Revisited

Abstract: Despite admitting that GM's acquisition of Fisher Body was motivated by the need of coordination, Benjamin Klein ["Fisher-General Motors and the Nature of the Firm" J. Law and Econ. XLIII(1), 2000] creates a new Fable: the Flint plant problem. He alleges that Fisher Body refused GM's request to build a plant in Flint, Michigan to supply bodies to Buick. According to the new story, GM's merger with Fisher Body in 1926 stemmed from a disagreement over whether or not to relocate a single plant from Detroit to Flint 57 miles away. This assertion is just the tail wagging the dog. Buick already operated three assembly plants and two large body manufacturing plants in Flint before 1924 and Fisher built Buick bodies in its Flint plant established in 1923. There was no hold up.