Chrysler and Imperial News Bureau
1600 Penobscot Building
Detroit 26, Michigan
When Walter P. Chrysler married his boyhood sweetheart in 1901, nothing indicated
that he would in years to come write an important chapter in the history of the automobile industry, although by
that time the number of cars in the country had jumped to 14, 800. It was not until 1908, when he was 33, that
an automobile first aroused his curiosity. That year he had reached the important post of superintendent of motive
power of the Chicago Great Western Railway and had distinguished himself as the youngest man ever to hold the job.
That was the year the Model T Ford made its first appearance and the year, too, of the incorporating of General
Motors. And that was the year when Walter Chrysler's supreme interest in railroads gave way to a motorcar.
It happened at the Chicago Auto Show, the first he had attended.
There he was taken by the beauty and mechanical sturdiness of a Locomobile phaeton - one of the earliest models to feature four doors. He couldn't drive an automobile, he couldn't afford the $5,000 asked for the car, nor was he interested in it primarily as a mode of transportation. He wanted it so that he might take it apart and study it as a fascinating new piece of machinery. Here was an embodiment of mechanical principles he had mastered. The pistons in this new machine - driven by expanding hot air instantly heated by ignited gasoline vapor - could give every man his own locomotive, one that would not be tied to rails. The possibilities for the future were enormous.
Chrysler's total savings in the bank were $700. He had a wife and two children to support. Yet again, he could not suppress his enthusiasm. He pleaded with a banker friend to lend him $4,300 to which he planned to add his own life's savings in order to buy the car. When the banker described Chrysler's willingness to wipe out his savings and incur the huge debt as "madness, " Chrysler retorted, "Just ask yourself what this country will be like when every individual has his private car and is able to travel anywhere."
Walter Chrysler got the loan and bought the Locomobile. He knew he was imposing heavily upon the patience and understanding of his wife; but she encouraged him then and later when he made temporary sacrifices in order to gain in the long run. The buying of the Locomobile was characteristic. It was in keeping with Chrysler's life-long philosophy of risking security, comfort, and present ease In order to prepare for new opportunities.
The Locomobile came by rail to Oelwein, Iowa, where Chrysler lived. There he hired a team of horses to haul it home from the freight house, and installed it in his barn.
During the next three months, he spent every hour he could spare from his railroad job taking the Locomobile apart and putting it together again, until he knew all its inner workings. Only then did he allow Mrs. Chrysler to coax him into taking her out for their first ride. That journey nearly ended in disaster, because Chrysler had been too busy studying the machine to teach himself to drive.
By this time he had the insistent urge to build machines himself. Consequently, in 1910 he quit as superintendent of machine repair and maintenance for an entire railroad to take a manufacturing post with the American Locomotive Company. Within the year, he was manager of the company's Pittsburgh works at a salary of $12,000 a year.
Chrysler's outstanding work there caught the eye of James J. Storrow, a director of American Locomotive, who was also chairman of the finance committee of General Motors. Storrow sent him to Flint to meet Charles W. Nash, then president of the Buick Motor Car Company. Impressed by his record, personality, and by his progressive ideas of production, Nash promptly offered him the post of works manager at Buick. He warned him, however, "We can't afford to pay you more than $6,000 a year."
This was the break, which Chrysler had been waiting. By this time some 1,000,000 cars and trucks were registered in the United States and his interest in automobiles had become greater. Moreover, a tour of the Buick plant had fired his imagination. He promptly accepted, to Nash's bewilderment. This act again demonstrated Chrysler's faith in his own abilities.
Within five years, Buick was paying him half a million dollars a year as president and general manager.
At Buick, Chrysler scrapped the leisurely carriage-making methods that had held back the automobile industry; he installed one of the first moving production lines; and he upped the factory's output from 45 to 550 cars a days By the time he left, seven years later, he had built, equipped, and started operation of a vast new plant; Buick cars had attained a reputation for sound design and manufacture; and Buick was making nearly half the money that General Motors earned.
In those same seven years, important new developments also were taking place in the rest of the industry and in the nation's motoring habits. Mrs. Alice H. Ramsey became the first woman to make a transcontinental trip from New York to California, driving a Maxwell-Briscoe (1909); Carl G. Fisher and his associates completed the Indianapolis Speedway (1909); the American La France Fire Engine Company produced its first motor-driven fire engine (1910); the electric starter, with generator-battery lighting and ignition system, stimulated sales and was making driving attractive to women for the first time (1912); Redlands, California painted traffic lines on its streets (1912); an automobile time payment plan was used for the first time (1913); the Liberty Bell went on a truck from Philadelphia to the Panama-Pacific Exposition in San Francisco (1915); and the manufacture of trucks began to assume importance to the economy of the country.
National motor vehicle output had swelled to 1,651,625 passenger cars and 224, 731 trucks and buses in 1919 when, besides his Buick responsibilities, Chrysler became first vice president of General Motors in charge of manufacturing. This brought him into almost daily contact with that unpredictable genius of the automotive industry, William C. Durant, then president of General Motors. Late the same year, after a series of policy disagreements with Durant, he left the company.
A millionaire at 45, Chrysler now attempted to retire, only to discover he couldn't break the habits of a lifetime. He continued to get up at six A. M., and he filled his house in Flint with friends and business acquaintances to talk of mechanical inventions and automobiles. His retirement lasted less than a year. Then Mrs. Chrysler rebelled. "Walter," she announced one day, "I do wish you'd go back to work!”
Chrysler, who had chafed under the inactive life, did just that at $1,000,000 a year.
The Willys-Overland Company found itself in 1920 involved in fi~rnncia1 difficulties that included large bank loans. One of the bankers who called on Chrysler to unsnarl the company's tangled affairs and for whom he rebuilt the company was the same man C who only 12 years earlier had lent young Walter $4, 300 to buy his first automobile. By his skill in organizing and in setting up thrifty and efficient operations, Chrysler, as executive vice president and general manager, succeeded in two years in reducing the company’s indebtedness by many millions of dollars.
While he still actively was reorganizing Willys-Overland in1920, Chrysler received an even more challenging opportunity.
Maxwell had been a respected name in the automotive world. Jonathan Dixon Maxwell, one of the true pioneers of the industry, had collaborated with Elwood Haynes in building the first Haynes car, back in 1894. Ten years later, he founded the Maxwell Motor Car Company, Inc., a Delaware company.
By 1917, this company ranked sixth in output among all automobile manufacturers in the United States. However, World War I and the boom that followed it, together with what appeared to be an impending shortage of materials, had tempted many companies to over-extend. At the same time, with the public eagerly buying any car that the maker could deliver, more than one manufacturer had neglected to improve his product to keep pace with the times. Suffering on both of these counts, Maxwell also had become embroiled in a complicated controversy with the Chalmers Motor Company, whose properties it had leased.
By 1920 it had failed, owing banks and merchandise creditors more than 25 million dollars. One plan of reorganizing had to be given up.
Then the various interests joined in bringing out a new plan for reorganizing the business under a Maxwell-Chalmers Managing and Reorganization Committee of which Chrysler was chairman. Under this plan a syndicate subscribed $15, 000, 000 of new money and the creditors received two-thirds of their claims in one-, two-, and three year notes of a proposed new company and one-third in cash. This plan the various interests accepted. The new Maxwell, a West Virginia company, took over and began to get on its feet.
So highly was Chrysler now regarded in automotive circles as an organizer and manufacturing expert, that the parties apologized for being able to pay him only $100, 000 a year against the million dollars a year he received from the Willys-Over-land interests. But as inducement they offered him stock options as well. Two of those interested, James C. Brady and his brother Nicholas, who became warm friends of Chrysler, told him:
"You are more than a production man now; you have revealed yourself to be a merchandiser and you are revealing capabilities in finance, too. If you will collect your reward in the future through ownership and its attendant satisfactions, you will fare better than ever before."
Meanwhile, Chrysler had been maturing plans for a completely new car - a car that would bear his name. It would be a quality car, light in weight, such as the public had been demanding for years. It would, according to the original prospectus, be a car "not extravagantly large and heavy for one or two people, but adequately roomy for five; economical to own and to operate - a car with the power of a super-dreadnaught, but with the speed and endurance of a fleet scout cruiser. "
The idea of such a car had begun to take shape when Chrysler first met in 1020 three brilliant young automotive engineers named Zeder, Skelton and Breer. Fred M. Zeder a graduate of the University of Michigan, Owen Skelton, from Ohio State, and Carl Breer from Leland Stanford University formed the perfect engineering team. These three men were the nucleus around which Chrysler Corporation eventually built its Engineering division.
The heart of Walter Chrysler's dream car was a high-compression engine. But engines with high-compression ratios were tricky to build. Many that had been designed and built burned out in less than 30,000 miles. Indeed, a considerable body of expert opinion insisted it was impossible to design a high-compression motor for a car of moderate price.
Accepting the "impossible" challenge, Zeder, Skelton, Breer and their assistants moved into the vacant Chalmers plant early in 1923 (production of Chalmers cars had been discontinued shortly after the first of that year) and went about their work in Utmost secrecy. They redesigned the conventional oil system. They changed the cooling system to obtain higher efficiency. They dampened vibrations. For testing purposes, they hid their experimental power plant under the hood of an aging Maxwell. Often the shabby old car would find itself halted between two big new ones with chauffeurs at their wheels at some busy Detroit traffic crossing. At the policeman's whistle, the test Maxwell would shoot out past the policeman and down the road before the startled drivers of the heavier cars could shift into second gear.
The Chrysler Six was America's first medium-priced, high-styled automobile. It had the high compression engine Chrysler wanted as well as four-wheel hydraulic brakes, aluminum pistons, full-pressure lubrication, air cleaner, oil filter, shock absorbers, tubular front axles, and many other features that never before had been combined in a volume-produced car. Only 160 inches overall, it nevertheless offered plenty of room for five adults. Weighing but 2,650 pounds, it rode as steadily as heavier models because of its low center of gravity and its carefully engineered balance.
The car was ready to show at a time when the public's interest in automobiles was high. The industry was turning out more than 3-1/2 million cars and trucks a year. These were bringing American cities closer together and were already an important factor in the nation's economic life.
Chrysler had planned to introduce his new car at the New York Automobile Show, which opened at Grand Central Palace on January 5, 1924. However, at the last moment the managers refused him space in the show because the car was not yet in production.
The news came like a thunderbolt to Chrysler and his associates, who had counted heavily on the new car making a sensation at the show. They had stretched their credit to the snapping point. The refusal of the show managers came as a major crisis because without the opportunity to show this beautiful new car, Chrysler's ability to attract new financing was jeopardized.
Chrysler called J. E. (Joe) Fields, then sales manager, who later became a vice president of Chrysler Corporation, and told him, "Go and hire the lobby of the Commodore. We'll have a show all right. " Chrysler's strategy was to show the car at the Commodore Hotel because the men of the automobile industry were rendezvousing there that year. Joe Fields hired the Commodore lobby and there the new Chrysler was shown.
Although not a part of the New York Automobile Show at Grand Central Palace, the Chrysler Six on display a few city blocks away literally "stole the show." Its sleek appearance, combining an air variously described as "foreign," "French," or "custom-built, " with a certain American ruggedness, was sensational. Its performance, once it was on the road, brought a steady stream of orders. For months, the factory was barely able to cope with the demand. In all, Chrysler built and sold almost 32,000 Chrysler Sixes in 1924 - then a record first year's sales for a new car.
In 1925 under a voluntary plan, the Maxwell Motor Corporation whose stock then was worth more than $400, 000, 000 in the market, transferred its business and property to a new company, the present Chrysler Corporation. Since the new Chrysler car was now outselling Maxwells more than three to one, the new company discontinued the Maxwell. That was the year that saw the 25-millionth U. S. motor vehicle, and it was a big year, too, for the new company.
New Chrysler models continued to captivate the public. A Chrysler Four, Series 58, introduced in June 1925, attracted more than a million people to Chrysler showrooms during the first four days it was on display. This car was the successor to the Maxwell, which itself had been improved dramatically by Chrysler engineering. Whereas nearly all-previous four-cylinder cars shook and swayed and rattled from the vibrating of their motors, Chrysler's engineers had succeeded in developing a power plant that was amazingly smooth and quiet. They achieved this by providing a third main bearing to the crankshaft. A floating platform spring supported the front end of the engine, while rubber pads and bushings helped absorb the shock and eliminated the destructive contact of metal on metal at the rear. This was one of the earliest uses of rubber in engine mountings to counteract vibration. Five years later, this important pioneering work in engine mounting was developed into Chrysler's famous patented Floating Power, a method of mounting the engine not only in rubber but through its center of balance as well.
By the fall of 1925, nearly 3, 800 dealers were selling Chrysler cars - twice as many as were selling Maxwells the year before. And although output went up and up, the Company found itself still hard pressed to keep pace with the new orders. Before the end of summer, both the old Chalmers plant on East Jefferson Avenue in Detroit and the Maxwell plant in Highland Park were turning out Chrysler cars.
That year, too, the new Company bought a body plant of its own. During the early days of motoring, the public's primary interest in automobiles had teen in what was underneath the hood. Consequently, most manufacturers, Chrysler among them, concentrated on the mechanical parts of the car, leaving body making largely in the hands of outside suppliers.
However, as the reliability of power plants increased, many customers – particularly women - were beginning to center their interest on the car's appearance. Body design and appointments, including interiors, took on increased importance. And by building its own bodies in the newly acquired Kercheval plant, just across the way from the East Jefferson plant, Chrysler was able to control quality, down to the most minute details.
In 1926, Chrysler offered the public its choice of four new models: a four-cylinder Series 50; a six-cylinder Series 60, selling in the $1, 000 class; the Series 70, an improved version of the Chrysler Six of two years before; and a big new Chrysler Imperial, Series 80.
Output climbed to 1, 250 cars a day that year, lifting the company to sixth place among all American automobile manufacturers. Early in 1927 - just two years after it was incorporated and only three years after Chrysler first introduced his revolutionary new car - the Company passed another milestone, becoming fourth in number of new cars registered.
Throughout this period, Walter Chrysler was by no means devoting his attention only to cars, plants, and machinery. He was also building a high-powered, smooth running management. In 1926 he asked K. T. Keller, whom he had known at Buick who was then a General Motors vice president, to join his management team, in charge of manufacturing. His financial wizard was B. E. Hutchinson whom Chrysler originally had brought into Maxwell in 1921 as treasurer. Within six months after joining, Hutchinson was elected vice president and treasurer of Maxwell in full charge of all its accounting and finance, and continued in this same capacity when Chrysler Corporation took over. Soon after, he became a director and a member of the Finance Committee of which he ultimately became chairman. He retired in 1954.
These men, and others of the same caliber, provided Chrysler Corporation with one of the strongest "first teams" in the automotive industry.
I have an old mimeograph copy of this I purchased with a bunch of other Chrysler stuff.
Page updated 5/19/2005