It is commonly said that in 1926 General Motors was led to acquire its supp
lier of automobile bodies, Fisher Body, because Fisher Body held up General
Motors. It is claimed that Fisher Body did this by locating its body plant
s far away from the General Motors assembly plants and by adapting ineffici
ent methods of production, thus increasing both the cost of producing bodie
s and the profits of Fisher Body under its cost-plus contract. This tale is
factually incorrect. What General Motors acquired in 1926 was the 40 perce
nt of the shares of Fisher Body that it did not already own. Furthermore, F
isher Body did not locate its plants far away from the General Motors assem
bly plants. It is also most implausible, for many reasons, that the Fisher
brothers would have used inefficient methods of production. There is no evi
dence that a holdup occurred.