Under the leadership of William C. Durant (Durant, William Crapo), the General Motors Company was founded in 1908 to consolidate several motorcar companies producing Buick, Oldsmobile, Cadillac, Oakland (later Pontiac), Ewing, Marquette, and other autos, as well as Reliance and Rapid trucks. GM introduced the electric self-starter commercially in its 1912 Cadillac, and this invention soon made the hand crank obsolete. GM remained based in Detroit and was reincorporated and named General Motors Corporation in 1916. The Chevrolet auto company and Delco Products joined GM in 1918, and the Fisher Body Company and Frigidaire joined in 1919 (the latter was sold in 1979).

Durant was forced out of the company in 1920 and was succeeded by Alfred P. Sloan, Jr. (Sloan, Alfred P., Jr.), who served as president (1923–37) and then as chairman of the board of directors (1937–56). Sloan reorganized GM from a sprawling, uncoordinated collection of business units into a single enterprise consisting of five main automotive divisions—Cadillac, Buick, Pontiac, Oldsmobile (discontinued in 2004), and Chevrolet—the activities of which were coordinated by a central corporate office equipped with large advisory and financial staffs. The various operating divisions retained a substantial degree of autonomy within a framework of overall policy; this decentralized concept of management became a model for large-scale industrial enterprises in the United States. Sloan also greatly strengthened GM's sales organization, pioneered annual style changes in car models, and introduced innovations in consumer financing.

By 1929 General Motors had surpassed the Ford Motor Company to become the leading American passenger-car manufacturer. It added overseas operations, including Vauxhall of England in 1925, Adam Opel of Germany in 1929, and Holden of Australia in 1931. The Yellow Truck & Coach Manufacturing Co. (now GMC Truck & Coach Division), organized in 1925, was among the new American divisions and subsidiaries established. By 1941 GM was making 44 percent of all the cars in the United States and had become one of the largest industrial corporations in the world.

General Motors grew along with the American economy in the 1950s and '60s and continued to hold 40–45 percent of total U.S. automotive sales. It bought Electronic Data Systems Corporation, a large data-processing company, in 1984 and acquired the Hughes Aircraft Company, a maker of weapons systems and communications satellites, in 1986.

Along with other U.S. automobile manufacturers, the company faced increasingly severe competition from Japanese automakers in the 1970s and '80s, and in 1984 GM began a new automotive division, Saturn, that used highly automated plants to produce subcompact cars to compete with Japanese imports. While GM's modernization efforts showed some success, heavy losses in the early 1990s forced the company to close many plants and reduce its workforce by tens of thousands.

Like other American automakers, however, GM made a robust recovery by the middle of the decade and returned its focus to its automotive businesses. It sold Electronic Data Systems in 1996, and in 1997 it sold the defense units of its Hughes Electronics subsidiary to the Raytheon Company, thus leaving the computer-services and defense-aerospace fields in order to concentrate on its automotive businesses. General Motors became the sole owner of Saab (Saab AB) Automobile AB in 2000. By the early 21st century GM had equity shares in a number of car companies, including Fiat (Fiat SpA), Isuzu, Fuji Heavy Industries (Subaru), and Suzuki.

In December 2008 Pres. George W. Bush (Bush, George W.) announced an emergency financial rescue plan to aid the “Big Three” automakers— Chrysler LLC, General Motors, and Ford—to prevent the collapse of the country's struggling auto industry. The plan made immediately available $13.4 billion in government loans from the Troubled Assets Relief Program (TARP), a $700 billion fund approved by Congress to aid the financial industry following the subprime mortgage crisis. The loans would allow the auto companies to continue operating through March 2009, by which time the plan required them to demonstrate “financial viability” or return the money within 30 days. An additional stipulation required the companies to undergo restructuring. The money was initially made available to General Motors and Chrysler; Ford claimed to possess adequate funds to continue operations and thus did not apply for government relief.