A Brief History of
The First 100 Years of the Automobile Industry
in the United States
Chapter 8 - Hard times slim industry, Detroit statrs selling dreams
by Richard A. Wright
A famous car of the '20s was the Jordan Playboy. Despite its flashy name, it was a mediocre car. Sales never hit 10,000 a year and it was gone before the stock market crashed in 1929.
It is remembered because of an ad that its maker, Ned Jordan, wrote in 1923. The ad, headed "Somewhere West of Laramie," did not dwell on the technical aspects of the Playboy. In fact, it did not mention them.
"Somewhere west of Laramie there's a bronco-busting, steer-roping girl who knows what I'm talking about," Jordan wrote (so legend has it) on an envelope while riding a train over the Wyoming plains bound for San Francisco. "She can tell what a sassy pony that's a cross be- tween greased lightning and the place where it hits, can do with eleven hundred pounds of steel and action when he's going high, wide and handsome.
"The truth is -- the Playboy was built for her."
The ad, which was published just a week after Jordan feverishly penned it and forever changed the marketing of cars, went on in this vein, then concluded:
"Step into the Playboy when the hour grows dull with things grown dead and stale. Then start for the land of real living with the spirit of the lass who rides, lean and rangy, into the red horizon of a Wyoming twilight."
In the '20s, just about every family had a car. The automobile was accepted and reliable. There were literally hundreds of name-plates to choose from and now cars had to be sold to buyers who by and large already owned one. And they all functioned in more or less the same way.
So what made a Jordan Playboy different? Romance. Or, as we call it today, image. Apparently not too many customers bought it. But the industry did.
Detroit began selling not only cars but dreams.
In 1929, the year the stock market crash in October triggered the Great Depression, new-car sales in the United States totaled a then-record 3,848,937. They would not reach that level again for 20 years.
The crash hit the auto industry with incredible impact. People still had to eat, they still needed clothes, they still needed shelter. But purchase of a new car could usually be put off. In September, General Motors stock sold for $73. It fell by half in October. In 1932, it bottomed out at $8.
In 1929, U.S. auto plants produced more than 5.5 million cars and trucks. By 1932, output fell to less than 1.4 million.
Many nameplates fell by the wayside during the Depression. Essex gave up in 1931, Franklin (of air-cooled fame) in 1934, Reo (Ransom E. Olds' second automotive venture) in 1936 and the magnificent Pierce-Arrow went under in 1937.
The Auburn Automobile Co., Auburn Ind., produced three American classics, the Auburn, the Cord and the Duesenberg, all of which went out of production during the Depression.
The Duesenberg was arguably the finest car ever built in this country, America's answer to the Rolls-Royce and the Bugatti. Styled in-house by Gordon Buehrig or with custom body by the most prestigious coachmakers, the Duesenberg J was the ultimate automobile and the ultimate status symbol.
The final nail in the Auburn company's coffin was driven by one of its most magnificent products, the Cord 810, introduced in 1936, and the upscale 812, introduced in 1937. Also designed by Buehrig, the front-wheel-drive car was powered by a V-8 engine and had a body so advanced that it still looks modern, with retractable headlights, wraparound grille, and chromed exhaust headers.
The car created a sensation, but the company had trouble building it, ran out of money and collapsed.
When Auburn folded, dies for the Buehrig Cord were adapted by Graham for its 1940 Hollywood model and by Hupmobile for its '41 Skylark. It was the last gasp for both these nameplates, although Graham-Paige Co. survived as part of the basis for Kaiser-Frazer after World War 11 (Joseph W. Frazer was president of Graham-Paige).
The "Big Three" survived the Depression, in fact GM made money every year and Chrysler actually grew. Ford Motor Co. was wounded almost mortally, although nobody knew it because it was not a public company and its bookkeeping was bizarrely primitive.
The Oakland and LaSalle nameplates were dropped by GM and Chrysler brought out its very modern Airflow in 1934, which did not sell well, but which established a number of design principles- unibody construction, engine forward of the front axle and all seats within the axles, among others -- which quickly spread through the industry.
Among the stronger independents, Nash dropped its Lafayette and Hudson sales declined, but its Terraplane carried it. Packard continued to lead the luxury-car segment, but the annual model change and changing demographics were already weakening its position. Packard was the car of the old moneyed class, while Cadillac was favored by the emerging new rich. The Depression was eroding the old aristocracy and when prosperity returned after World War ll, Cadillac soared and Packard was doomed.
Studebaker brought out its low-priced Rockne (named for the popular Notre Dame football coach) in time to get chewed up by Ford's Model A and it bought into Pierce-Arrow just as the luxury-car market was collapsing, but it survived a financial crisis in 1933 and came back to play an important role in the post-war boom market of the '40s.
As the auto market became more competitive, the push for mechanical progress became intense and the Depression was a fertile period.
The '29 Cord featured front-wheel drive. Ford put a V-8 in its '32, the first low-priced V-8. (It would be all alone in that market until Chevrolet and Plymouth got V-8s in 1955.) Pierce-Arrow, Lincoln and Cadillac experimented with V-12 and V-16 engines.
A number of makes used superchargers, which forced air into the carburetor to allow the engine to burn more fuel faster. The modern turbocharger is based on the same principle, but the turbocharger is driven by exhaust gas, while superchargers are driven by the engine.
In 1938, Oldsmobile offered Hydra-matic transmission as optional equipment, the first true automatic shift that worked.
The Depression also finally did in William Durant. About two months after his second and final ouster from General Motors in late 1920, Durant incorporated Durant Motors. He had no car, but he had the faith of investors and goodwill of dealers and before production began in 1921 of the Durant Four, he had 30,000 dealer orders. The next year, he brought out a low-priced car, the Star, to compete with Ford and Chevrolet.
Durant was on his way again. He added nameplates -- the Flint, the Eagle, the Princeton and the Mason truck. To compete with Cadillac, Packard and Lincoln, he acquired Locomobile. He gobbled up supplier firms. In 1927, he announced formation of Consolidated Motors, clearly intended to challenge GM. It would include the Star, Moon, Chandler, Gardner, Hupmobile, Jordan and Peerless. But it never became a reality, because Durant was again in financial trouble.
A major figure in the bull market of the '20s, Durant had amassed a $50-million fortune by 1927, but displayed his old weakness of losing interest in day-to-day management of his company in favor of empire building and stock manipulation.
When the crash came in '29, Durant was hit hard. In 1933, Durant Motors went broke. He was down, but not out.
He still had a plant in Lansing and he signed a deal to build and market the Mathis, a small French car. But in the depths of the Depression, it never got off the ground. In 1936, William Durant filed in bankruptcy, claiming debts of $914,231 and assets of $250.
In 1940, he opened a bowling alley in Flint, the North Flint Recreation Center. Always thinking big, he had plans for 50 such centers across the country. He suffered a massive stroke in 1942, shortly after a trip to Nevada to investigate a venture in mining cinnabar, a mercury ore.
He and his wife moved to New York, where they lived quietly, supported in part not by the General Motors he had created, but by four long-time associates - C.S. Mott, R.S. McLaughlin, John Thomas Smith and Alfred P. Sloan.
Durant died in that apartment March 18, 1947.
When the Democrats nominated Al Smith to run for president in 1928, Smith called on a friend for help, John Jakob Raskob, chair- man of GM's finance committee, and a lifelong Republican who described his profession in his Who's Who listing as "capitalist." Raskob accepted the job of chairman of the Democratic National Committee.
Sloan, an ardent supporter of Herbert Hoover, demanded that Raskob resign, either as Democratic chairman or from GM. Raskob refused. The board of directors supported Sloan in a split decision. Hurt, Raskob resigned from GM. So did Pierre du Pont, board chairman and Raskob's mentor. Smith, of course, lost the race for the White House to Herbert Hoover.
After Raskob resigned, he cashed in $20 million worth of GM stock and built the Empire State Building, a spectacular, though unprofitable, undertaking. He continued as Democratic chairman, playing an important role in the election of Franklin D. Roosevelt as president in 1932 -- an unusual role for a self-proclaimed "capitalist."
In Europe, the industry had taken a somewhat different path than the American, with U.S. companies generally leading in mass-production techniques. But the period between the wars were also fertile in Europe and companies then little known in the United States, but who would make themselves known in 20 years, were busy.
In newly created Czechoslovakia, Tatra began building unusual but high-quality cars in 1923. In Britain, Morris Garages began building the MG in 1924. The world's two oldest auto makers, Germany's Daimler and Benz, merged in 1926 to form Mercedes-Benz. In 1923, Opel became the first German maker to mass produce cars using American techniques, then was acquired by GM in 1928.
In 1927, a Swedish ball-bearing company named Volvo (Latin for "I roll") began building solid automobiles and in 1928 Bayerische Motoren-Werke began building a car called BMW. Citroen introduced its first front-drive model in 1934.
In Japan, DAT was building a second-generation car called Son-of-Dat, or Datson (the DAT stood for initials of the founders, Den, Aoyama and Takeuchi). The car's name was changed to Datsun in 1932 to tie in with the Rising Sun of Imperial Japan. Most of the Japanese nameplates familiar to the modern world did not yet exist.
And, in 1934, Adolf Hitler ordered Ferdinand Porsche to design a "People's Car," or "Volkswagen." This odd-looking little rear-engined air-cooled car would leave its mark on America and present Detroit with its toughest challenge.
Copyright 1996, Richard A. Wright
Published by Wayne State University's Department of Communications