From the book, Get a Horse. Author’s book dedication: To my mother and father in memory of those days when a Marmon touring car was their pride and joy.
IN 1921 THERE were eighty-eight firms in the United States manufacturing automobiles. But strangely enough, as production figures mounted, the number of automobile companies decreased. Where once there had not been enough cars to go around, the industry was now able to turn out more than could be sold.
In this competitive market, firms which already had volume production were best able to cut prices for still larger
volume. They could produce cheaper, advertise more extensively, hire the best engineers and executives, and attract the best dealers. The others were in a fix. That’s why, from 1921 to 1928, a great many excellent cars were muscled out of existence.
Here is a list of old-time automobiles that once could be seen on the streets of any big American city, and the year of their demise:
-1921 Jackson, Halladay, Metz, Briscoe
-1922 Regal, Pan-American, King, Mitchell, Saxon
-1924 Winton, National, Elgin, Crane-Simplex, Crawford
-1925 Westcott, Stanley Steamer, Mercer, Wills-St. Claire, Haynes, American, Cole
-1926 Cleveland, Apperson
-1927 Premier, Jewett, Paige-Detroit, Case
-1928 Davis, Diana
|Metz autos were joined by many other small manufactures in the 1920’s industry shake-out.|
During this shakeout period, when weaker sisters were losing their grip almost monthly, the greatest super-producer the industry ever knew, found the tough going just to his liking. His name was Walter Percy Chrysler.
Chrysler was another Horatio Alger character. Born in Pottawatomie County, Kansas, he quit school the year the Duryeas started building their first automobile and found a job in a Union Pacific roundhouse wiping engines. When he had saved enough money, he took a course in mechanical engineering from the International Correspondence School. Chrysler needed more schooling as much as he needed a clubfoot. He was a big, tough, two-fisted guy determined to make a million and headed sure as hell for success. There was no nonsense about Chrysler; he saw he couldn’t get any place in Pottawatomie County, so he got out of there. By the time he was thirty-three, he was superintendent of motive power for the Chicago and Great Western. Then he became manager of the American Locomotive Works at Pittsburgh.
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There is a story that has been told and retold to the effect that Chrysler saw a Locomobile at the Chicago Automobile Show in 1905 and fell in love with it. He is said to have taken his life savings of $700 and borrowed an additional $4,300 in order to purchase the Locomobile, a gleaming white monster with red leather upholstery. Then he is supposed to have shipped the car home, put it in the barn and there disassembled it nut by bolt just to learn how an automobile was built.
This is a press agent yarn which defeats itself. No banker in his right mind would have loaned $4,300 on a $5,000 car in 1905. Besides, the story makes Chrysler sound like a damn fool when obviously he was a man of sound and practical intelligence. If he had wanted to tear a car apart, he could have bought a second-hand Locomobile for $1,000. Or he could have bought a new Ford for $850. Surely a man who would later have bankers begging him to cure their $50,000,000 headaches did not go in debt $4,300 merely to learn how a Locomobile was built.
Chrysler may, at some time, have taken a car apart and put it back together again but if so it probably needed it. And there was no loan against it—not in 1905.
But it is quite probable that he never bothered a great deal about the guts of an automobile. Chrysler was a production man, not an automotive engineer. Getting things produced, economically and efficiently, was his special talent. The fact that he was a good mechanic and a fairly good monkey-wrench engineer may have been a factor in his success but they were incidental compared with his skill as a production man.
The story is also told of Chrysler that he quit a job with the American Locomotive Works which paid him $12,000 a year to take one at Buick for $6,000. The press agents and writers of articles for popular magazines insist upon making him sound like a half-wit. They leave out the fact that in addition to his salary at Buick he had a bonus arrangement which eventually made him a millionaire.
The president of Buick at that time was Charles W. Nash, who went to work for Billy Durant, in 1899, polishing lamps in the Durant-Dort Carriage Company. He rose to be general superintendent, and, in 1910, Durant, even though he had just been dumped from the presidency of General Motors, persuaded its directors to place his man, Nash, in charge of Buick. Nash looked around for a works manager to help him pull Buick out of its difficulties and found Chrysler.
|Buick was selling well for General Motors when Chrysler took over the presidency of Buick.|
The two men understood each other and worked well together. Even though Nash had come from a carriage factory and Chrysler from a locomotive plant they had what it took to get Buick rolling. In 1912 Nash, the lamp polisher, became president of General Motors, and Chrysler, the engine wiper, took over the presidency of Buick.
When Durant came riding back into power as the biggest stockholder in General Motors he found that Buick was the strongest unit in the company and was anxious to see both Nash and Chrysler remain where they were. But Nash knew that with Shoot-a-Million Durant in power he would be a mere figurehead president, and that in all probability Durant would kick the props out from under the solid financial structure that he, Nash, had built up. So in 1916 he resigned and, with the backing of Wall Street, bought the Thomas B. Jeffery Company at Kenosha, where the Rambler car had once been made and then the Jeffery. A new firm was formed called the Nash Motors Company.
Nash urged Chrysler to join him at Kenosha, but Chrysler turned him down. He was sitting pretty where he was, with stock bonuses coming up and Buick going like a box factory on fire. So Nash wished him luck but warned him to be on the lookout for the moment when Durant started to over-expand.
|Charles Nash got out of General Motors and produced his cars at Kenosha, Wisconsin.|
It was four years before Chrysler decided it was time to run for the storm cellar. He is said to have sold his General Motors holdings for several millions. Some say he was just lucky and some say that he knew what he was doing, but at least he was no longer with General Motors when Durant took his second tumble from power. Chrysler was forty-five years old the year he resigned from Buick. It was his intention to loaf for the rest of his life. He got on a ship and went to Europe to relax.
Then somebody jerked a rug from under the automobile business. A lot of companies took a tumble and needed help to get back on their feet. General Motors tried to get Chrysler back; Nash still wanted him; Packard made an offer; and Wall Street had two or three jobs for him. He could no more relax than an old fire-engine horse when somebody sounds a gong. He had forgotten how to loaf, if he had ever known.
One company in serious trouble was Willys-Overland. It owed something like $46,000, 000. The bankers offered Chrysler a salary of $750,000 a year to take charge of this super-headache. That was the sort of trouble Chrysler liked. He took the job on and before the year was out had reduced the company’s indebtedness to $18,000,000.
|Willys-Overland was in financial trouble when Chrysler took over and turned them around.|
The bankers were so pleased by this major operation that they asked him to take on the prize headache of the industry. It was the Maxwell Motor Company.
The history of Maxwell is as complicated as restaurant hash. John Maxwell was a mechanic working for the Apperson brothers at the time they built Elwood Haynes’ first automobile. Later he went to Detroit and landed a job with the Olds Motor Works. There he and Roy Chapin worked together testing the early Oldsmobiles. His experience with these early cars made a competent automotive engineer out of Maxwell and in 1903 he designed a car of his own.
These designs were shown to Benjamin Briscoe who owned a sheet metal plant in Detroit that had been doing considerable work for Olds. Briscoe had already been mixed up in an unfortunate venture. Just a short time before, he had disposed of the controlling interest in Buick to a group of men in Flint, taking a small loss. But Briscoe knew there was big money to be made in automobiles so he decided to back Maxwell. The result was the Maxwell-Briscoe Motor Company.
The Maxwell car was a quick success, but it had been launched on a shoestring. To expand the business, Briscoe went to Wall Street and secured additional capital. As has been mentioned in an earlier chapter, he and Billy Durant tried to form a big merger with Ford and Reo; then later they tried to form a holding company with the help of
J. P. Morgan. These plans fell through, but Briscoe, assisted by those eastern capitalists who were interested in the Electric Vehicle Company, formed a holding company in competition with Durant’s General Motors called the United States Motor Company.
Briscoe’s company eventually controlled some 150 firms including the companies that manufactured Columbia, Brush, Stoddard-Dayton, Briscoe and Maxwell. But in 1912 the weak members of the corporation became too big a load for Maxwell to carry and the United States Motor Company went into receivership. By 1920 the Maxwell Motor Company was still saddled with a brutal indebtedness. At this time, the Chalmers Motor Company was also in the hands of the bankers. It was made a subsidiary of Maxwell and the two companies were dropped into Chrysler’s lap with the blessings of the banking group that controlled them.
|In 1920, Maxwell Motor Company was still saddled with a brutal indebtedness.|
Chrysler was still struggling to get Willys-Overland out of trouble but he took on the additional load with the enthusiasm of a Frank Merriwell, charging into the big game with the score 21 to 0 against dear old Rutgers.
The banks had already sunk over $18,000,000 in the Maxwell setup and the company owed its creditors $35,000,000! Chrysler decreed that it would take another $15,000,000 to save the home team. The bankers groaned but agreed to the additional financing and gave Chrysler a free hand to rescue Maxwell if he could.
There were some 26,000 Maxwells sitting in warehouses over the country waiting to be sold. There was no market for them; the dealers had lost their morale; the public was keeping its money in the banks.
Chrysler knew that the first thing he must do was to get the company’s money out of those Maxwells. He did it by slashing the price to the bone. The company made only $5 on each car but it got its cash out of those Maxwells. Then Chrysler put out a new Maxwell and a new advertising slogan. It was very simple. The car was no longer called the Maxwell. It became The Good Maxwell.
|Chrysler’s ads for the “Good Maxwell” worked. Sales shot up to 48,850.|
For some reason people believed those ads and in 1922 Maxwell sales shot up to 48,850 and the company earned $2,000,000. But its subsidiary, Chalmers, wasn’t able to get over the hump. The company lost a million dollars. Ruthlessly Chrysler eliminated Chalmers and concentrated on the Maxwell. By 1923 The Good Maxwell was going along in good shape. Another few years and that big debt to the bankers would be paid off.
But Chrysler wasn’t entirely satisfied. For two years, at least, he had wanted to make a deal with Fred Zeder who had designed the famous EMF car. With the purchase of EMF by Studebaker, Zeder had gone to work for the old wagon-making firm, then later had organized the Zeder, Skelton, Breer Engineering Company. This trio had designed a new car with such innovations as four-wheel hydraulic brakes, an all-steel body, and a high-compression, high-speed engine. They hoped to sell the car to one of the big companies.
Chrysler had first wanted to make their machine at the Willys-Overland plant, but that deal had fallen through. Then he had toyed with the new car when he shifted to Maxwell. But finally he had been forced to turn down his friend Zeder.
So Billy Durant, who was now on his own, became interested in Zeder’s car, as did the Whites, in Cleveland, and the Studebaker crowd. But they were timid about bringing out anything quite as revolutionary as this new car.
For a while, Zeder almost had backing from Wall Street to put out a car under his own name. But finally Chrysler got things in shape at Maxwell and was able to negotiate with Zeder. He turned the Chalmers plant over to the engineering firm and by 1924 a car called the Chrysler was coming off the production line.
|Walter next to his Chrysler.|
Although Chrysler was one of the best known figures in the automotive world, the general public was none too familiar with him. So a national advertising campaign shouted his greatness to the public and informed them that his name was pronounced Cry-sler. And the public relations men were turned loose with instructions to make him as well known as Ford.
In the year that the Chrysler car was born, 32,000 were sold against 50,000 Maxwells. The following year the Chrysler Corporation was formed, Maxwell Motor Company was absorbed by it and the Maxwell name was dropped.
By 1928 Zeder, Skelton and Breer had engineered two more cars for Chrysler. They were called the DeSoto and the Plymouth. The Chrysler, which had once sold for $750, was moved up into a high-price bracket and DeSoto and Plymouth went into competition with Ford and the low-priced cars of General Motors.
Meanwhile, the banking firm of Dillon, Read & Company, which had purchased Dodge Brothers from the two Dodge widows, had been watching Chrysler turn the Maxwell lemon into a plum. They were anxious to get out of the automobile business and suggested a merger with Chrysler. Chrysler needed the plant facilities of Dodge, so he was willing, and the merger was finally effected with the transfer of $170,000,000-worth of Chrysler stock.
|Dodge joins the Chrysler product line.|
The Chrysler Corporation with four different cars under its banner was now a full-fledged competitor of General Motors and Ford. Less than fifteen years after Walter Chrysler took over the all-but-defunct Maxwell Motor Company, the Chrysler Corporation had cornered, for its share, twenty-seven per cent of all motor car sales in America.
Thus out of a colossal failure, the boy from Pottawatomie County built a phenomenal success.
|The Chrysler car itself was moved up in the price brackets of the Chrysler line. Shown here is the 1928 Chrysler Model72.|