An Early History of the Chrysler Corporation

Chrysler at the wheel in a Plymouth plant in 1934

The Last of the Big Three: The Chrysler Corporation

Just as General Motors was best known for organization, Chrysler was known for its engineering and innovation.³⁴ Among early Chrysler innovations were the following:

1924 – advanced design, high compression engine

1929 – down-draft carburetor

1931 – fully automatic spark control

1934 – scientific weight distribution; unitized body; automatic overdrive; one piece curved windshield

1937 – safety padding in back of front seats

1941 – fluid drive (automatic transmission)

1949 – key-operated combination starter and ignition switch; safety cushion dash

1950 – electric window lifts

1951 – hemispherical combustion chamber V-8; power steering

1955 – all-transistorized radio

During the first two decades of its history, the firm was the largely the result of the efforts of Walter Chrysler and a dedicated group of engineers.³⁵ Chrysler, a self-taught mechanic with roots in Kansas, began working for the railroad, and in 1908 bought a $5,000 Locomobile automobile. He promptly took the Locomobile apart piece by piece so that he could learn about it. Chrysler would later seek employment at Billy Durant’s Buick Motor Car Company, where he would work as a foreman and production manager. While Henry Ford gets credit for mass production, partly due to his relentless campaign for recognition, at Buick similar kinds of manufacturing improvements were being made by Chrysler and associates, but in a slightly different way. Ford had started with ignition components, specifically the magneto, and had worked out the means of assembling it and then in turn other small parts. Ford worked his way forward to the final product, the Model T. In contrast, Chrysler began with the finished Buick and went backwards looking for improvements. Next to Ford, Buick was the most important marque of the WWI era, and its success was in no small measure due to the efforts of Walter Chrysler, the one-time sweeper of a Union Pacific roundhouse, farm hand, silverware salesmen and grocery boy. Ongoing disputes with Billy Durant, however, ultimately led to Chrysler’s departure. After a one-year retirement, he landed the job of saving first a sinking Willys-Overland organization, and then Maxwell-Chalmers.

Chrysler was one of those rare breed of individuals who wanted to put his name on something. To that end, in 1924 he introduced a model named after him that was the most important car of the 1920s. As Walter Chrysler himself said about the 1924 Chrysler, “I gave the public not only quality but beauty, speed, comfort in riding, style, power, quick acceleration, easy steering, all at a low price.” At the heart of the car’s development were the efforts of 3 engineers who would contribute in big ways to the successes of the Chrysler Corporation for decades to come – Fred Zeder, Owen Skelton, and Carl Breer.

            As Chrysler biographer Vincent Curcio has stated:

It was a long time coming, but the new Chrysler automobile was made out of whole cloth by men who had no preconceptions of what a car should be, and because they were not burdened with a preexisting corporate culture dictating design and manufacturing traditions, they were free to burst onto the world with a brand new kind of car.”³⁶

            The 1924 Chrysler was the product of scientific and technical research. It was said that it was a $1,500 car that could give $5,000 thrills. It was the first modern car made not for rural farmers, but for the now predominant urban America. And it drove like a modern car:

            On starting the engine, I was struck by the uncanny absence of those sounds so common to others. No clicks from the valve gear; no whine from the camshaft drive. Just a comforting tautness, as though each part was perfectly shaped to fulfill its function. The engine seemed to run with a freedom that suggested the total absence of friction. The controls were light and precise in action. Touch the brake pedal, and the perfectly equalized hydraulic system responded immediately. Touch the throttle, and response was instant . . . Even gear shifting had been transformed from heavy drudgery to an act of swiftness and ease . . . There was also a brand new kind of smoothness, so utterly lacking in effort it reached the senses in dynamic flow, backed by a torrent of power in reserve . . . The modestly priced little Chrysler equaled our most costly machines in silence and smoothness, but added to this a sparkling new ingredient, mechanical effortlessness.³⁷

            While it was Walter Chrysler who had so perceptively recognized that American consumers were rapidly changing in their tastes and expectations, his engineering three musketeers – Zeder, Skelton and Breer – were most responsible for its introduction and subsequent success. With it came profits of more than $4 million in 1924, and in 1925 a transition in the name of the firm from the Maxwell Motor Car Company to the Chrysler Corporation. By 1924 the brief but deep post-WWI recession was over, and America was in the midst of a prosperity decade that witnessed the expansion of urban areas and key industries associated with the automobile, including steel, glass, and rubber manufacturing. Roads were getting better, and thus more Americans had a penchant for speed. New paints were introduced that resulted in more colorful cars, and as fashions became more widespread, so did fashionable cars for the middle classes. Closed cars were now “in,” and cars began to be thought of as extensions of the home, with all its comforts, including the new communications device, the radio. And cash-poor Americans no longer had to wait for what they wanted, as installment plans were introduced so that one could get what one wanted when one wanted it. To be sure, the price to pay was that many American workers had to be subjected to industrial discipline and the pressures of time in this “Machine Age,” but high among the car’s benefits was the freedom to go wherever and whenever one pleased.

            Chrysler’s advanced engineering as expressed in its initial model ensured that the company would sell an excellent product for some years to come. For Walter Chrysler, the next major step in his drive to become a leading manufacturer and indeed take his firm to the level of what would become known as the “Big Three” involved simultaneous expansion and diversification. First, Chrysler established a luxury, top-of-the-line model, named the Imperial, in late 1925. By 1926 the firm sold 162,000 cars, with some 9,000 Imperials manufactured. In 1927, sales topped 192,000.

            During the late 1920s GM began offering cars makes that were considered to be companion cars to established product lines. Thus, Pontiac was created as a companion to Chevrolet, and LaSalle to Cadillac. These cars served to fill in market gaps. To counter these moves and in response to the introduction of the Ford Model A, Chrysler began to think of adding new makes of his own to the Chrysler lineup. First, Chrysler acquired the Dodge Brothers Company, and then created a new vehicle, the DeSoto.

            Horace and John Dodge were born in the 1860s in Niles, Michigan.³⁸ The brothers, known for demanding perfection on the job and the consumption of liquor when not in the shop, were machinists who had built engines, transmissions, and axles for Henry Ford during the first decade of the twentieth century. They also built a large plant in Hamtramck, Michigan in 1910, and four years later struck out on their own in the manufacture of the Dodge automobile. According to Vincent Curico:

And what a car it was. At $785, it was 50 percent more expensive than a Model T, and worth every nickel. The Dodge Brothers Touring Car boasted a 35-horsepower engine, compared to 20 for the Model T: it had a sliding-gear transmission, rather than Ford’s clunky planetary one, which required a lot of servicing:  its pioneering all-steel welded body, designed by Edward Budd, was sturdy and less subject to vibration than the typical wood-based body; it sported a speedometer and a windshield, a Cadillac-style electric system (which included a self-starter and electric lights powered by a wet battery and generator), and demountable rims (which made possible for a motorist to carry a fully inflated spare.)³⁹

            By the end of 1915, 45,000 Dodges had been sold. It was said that a Ford rattles, a Packard purrs, and a Dodge chugs. And these chugging Dodges quickly became legendary. They were used in Mexico by the U.S. Army to track down Poncho Villa. They were later driven by U.S. troops in Europe during WWI, one driver being none other than air ace Eddie Rickenbacker, who would later produce his own innovative car in 1924.

            Despite the Dodge brothers’ criticisms of Henry Ford’s freezing of the production model once established, they did the same thing, advertising “constant improvements but no yearly models.” At the zenith of their careers in 1920, the Dodge brothers’ lives were cut short suddenly, due to pneumonia (John) and cirrhosis of the liver (Horace).

            Under the guidance of John and Horace’s widows, the Dodge Brothers firm continued to sell cars, with the able management of Frederick Haynes ensuring profitable years. Sold in 1925 to the investment firm of Dillon, Read & Company, Dodge Brothers declined gradually after 1926, as it entered a period of poor management.

            It was then that Walter Chrysler came into the picture. He had recognized that large and well-equipped Dodge facilities would add greatly to his own existing plant capacity, and that the Hamtramck site had the potential of allowing Chrysler to add new product lines and volume that he so desperately needed to keep up with GM.

            In the midst of negotiations to purchase Dodge, Chrysler started with a ploy that turned out to be a new car product line, the DeSoto. The DeSoto was originally conceived as a way to devalue the Dodge so that it would be easier to purchase, but by early 1928 it turned into an operating group within the Chrysler Corporation. The car was named after a sixteenth century adventurer who discovered the Mississippi River, and the group offered Spanish-sounding models like Cupe Business and Roadster Espanol. A total of 1,500 dealers signed up to sell the car, which was introduced first as a 1929 model. The DeSoto was rather attractively styled, and equipped with a 6-cylinder engine, and Lockheed hydraulic brakes. Consumers quickly responded, as more than 80,000 DeSotos were sold during its first year.

            The DeSoto was a 6-cylinder vehicle, and concurrent developments centered on a 4-cylinder vehicle, which would become the Plymouth. The Plymouth was initially envisioned as a parts bin car, essentially a patchwork of existing parts, and therefore inexpensive to build. A closely-guarded secret in 1927, it was named Project Q in early 1928 and began production in June of that year. On one hand, the car was loosely based on the old Maxwell, but it also had numerous features that the Ford and Chevrolet did not have. One of its main features was rubber motor mounts – the precursor to a Chrysler feature called floating power. This innovation isolated the car from the road, and resulted in a far quieter ride. Additionally, the Plymouth had full-pressure lubrication, a waterproof distributor, and aluminum alloy pistons, along with hydraulic brakes. As an ad in the Saturday Evening Post proclaimed: “We have named it the Plymouth because this new product of Chrysler engineering and craftsmanship so accurately typifies the endurance and strength, rugged honesty, the enterprise and determination of achievement and freedom from old limitations of that Pilgrim band who were the first American colonists.”⁴⁰

            Dillon, now controlling a Dodge Brothers firm that was dropping like a rock in value due to the introduction of these new Chrysler models, became desperate to make a deal. After extended negotiations and a complex stock exchange, the Dodge Brothers became the Dodge division within the Chrysler Corporation. With this merger, the new Chrysler Corporation had a capacity to produce some 750,000 cars, putting it firmly in third place behind GM and Ford with assets and capitalization of about a third of Ford and a quarter of General Motors.

            The Dodge Brothers acquisition was reflective of broader changes taking place in the auto industry during the 1920s. The number of manufacturers gradually declined, and by the end of 1928 Ford, GM, and Chrysler were producing about 80 percent of all cars made in the U.S. Some thirty-four smaller car makers remained in business. With the coming of the Great Depression, a number of these would falter and fold, but Walter Chrysler’s star would continue to rise, reflected in his construction of the Chrysler building in New York City and his overtaking Ford as the number two manufacturer in 1934.

            Key to Chrysler’s success during the 1930s was a number of changes in the design of the Plymouth. In 1931, an all-new Plymouth was introduced, the PA, which was longer and more powerful than the Ford Model A at a price that was sure to be attractive to Depression-era buyers:  $535 to $645. It was said that Walter Chrysler took the third Plymouth PA off the line, drove it to Henry and Edsel Ford’s Dearborn offices, sat for an hour with the two, then gave them the car and took a taxi home. By the end of the year some 94,000 units were sold, and Plymouth became the number three seller in America. With the success of minor improvements over the next two years, the one out of every four cars sold in America were Plymouths.