The Ghosts of Detroit (Part 2)

By David Glenn Cox

It was Durant who invented the modern car company, different models in

different price ranges with different features all made with basically

the same parts. The problem was Durant was a victim of his own success,

he kept on buying more and more suppliers and car companies that added

little to the GM line up. He bought thirteen different car companies

and ten parts companies and then the sales began to slump. GM would

need $12 million to keep from shutting its doors, and the bankers

agreed to the loans one condition, that Billy Durant give up his

control of GM.

On November 15, 1910 Durant announced his

retirement and for most people that would be the end of the story, but

Billy Durant was not most people. The bankers had no better luck

managing GM than Durant had. They fought a nightmare of duplicate

companies producing duplicate components and like most bankers they

moved to cut the large items rather than the million small items. They

reasoned that GM made more money selling big cars than they did selling

small cars, so they slashed smaller models in favor of bigger ones. The

Buick 10 was cancelled; it was a small four-passenger runabout designed

to compete with Ford’s Model T.



In 1911, Buick sales were down

50%. Their factories were closing, their workers were laid off by the

thousands, when along came Billy Durant. You remember Billy, don’t you?

Durant announced to the world that he was founding a new car company

and its models would be designed by one of the foremost auto racers in

the world, Louis Chevrolet. Durant bought one of the shuttered Buick

factories and staffed it with former Buick workers and began building

the Chevrolet 490. The 490 was actually the Buick model 10 which had

been cancelled by the bankers.

The 490 earned its name from the

fact that it cost $490, fifty dollars more than a Ford Model T, but

offering an electric starter and electric running lights and a spare

tire. By 1915 Chevrolet was selling more than 13,000 cars a year, but

Durant was still unhappy. He had begun to acquire large blocks of GM

stock, and he encouraged his friends to buy GM stock as well. In

September of 1915 Durant showed up unannounced at the annual

shareholder’s meeting with GM’s Board of Directors.

Like a scene

out of a Hollywood movie, Durant was followed into the room by several

assistants carrying bushel baskets full of GM stock certificates.

Approaching the board he announced, “Gentleman, I now control this

company.” He managed to stay until 1920 when he was again forced out

because of his penchant for buying up companies. Through pluck and

guile, with hard work and genius, Billy Durant had built General

Motors. But by 1920 he had again driven GM deep into debt as sales

fell, and so again, Durant resigned.

In 1921 Durant filed papers

of incorporation for the Durant Motor Company and again he would

compete by building small cars against the Ford Model T. The Durant

Star went head-to-head with the Model T, while the Durant Six and the

Flint Model went head-to-head with Chevrolet and Buick. But the company

folded in the depths of the depression in 1933. Durant had been one of

the multimillionaires who had thrown their own fortunes into the stock

market, trying to stop the crash. Durant listed his personal assets at

$250. He ended up owning a restaurant and a grocery store, which he

operated out of a former Oldsmobile showroom. Durant being Durant, he

later added bowling alleys to his conglomerate holdings.

Meanwhile

the shaky partnership between the Dodge Brothers and Henry Ford had

become insufferable to Ford. No longer having any cash problems, Ford

resented the brother’s share of his company. Ford built his own parts

and manufacturing factories to eliminate his need of the Dodges. That

was fine with the brothers, for they, too, were rolling in cash, Ford’s

cash. Since they no longer made parts for Ford, and having the tooling,

the factories and the workers, the Dodge brothers conceived of their

own car, created from the suggestions which Ford had rejected.

The

new Dodge featured a speedometer, electric lights and a gas gauge. The

Ford required you to put a stick in the gas tank to see how much fuel

was left in it. Ford did not think it at all funny that his stock

dividends were being used to bankroll his competition. When the Dodges

offered to sell out to Ford, in a fit of stubbornness he refused.

Instead Ford announced in 1916 that the company would no longer pay

dividends; the company would plow all its profits back into the company.

It

was an absurd concept; the Ford Motor Company couldn’t spend all the

money they already had on hand. Like Durant, Ford, by controlling his

suppliers and mass producing the same model year after year, saw

manufacturing costs fall to ridiculous levels. Even at Ford’s

five-dollar-a-day wage, if twenty extra men could turn out ten extra

cars, it was more than cost effective.

The Dodges sued and the

court ordered Ford to pay $19 million in back dividends, but since

Henry Ford was the majority stockholder, most of the money went

straight back to him. He then announced that he was retiring and turned

the company over to his son, Edsel. The next year a Los Angeles

newspaper broke the story that Ford was planning to open a new car

company hiring 50,000 workers and selling cars for between $250 and

$350.

The Dodges had had enough. If Ford actually went through

with the scheme it would bankrupt the Ford Motor Company as well as

Dodge. The Dodges sold their stock for $25 million and all the rumors

of Ford’s new car company quickly evaporated. In 1920 Horace Dodge fell

ill with pneumonia; John Dodge fell ill ten days later, and both men

passed away from the world that they were integral in creating. Their

widows sold out to the bankers and the bankers sold out to Walter

Chrysler in 1929.

Walter Chrysler, like the Dodge Brothers, had

worked around steam engines. An executive at GM asked Chrysler if he’d

ever given any thought to manufacturing automobiles. Charles Nash, then

the president of Buick, made Chrysler his production chief. After the

ouster by the banks of Billy Durant, it was Chrysler who was seen as

having the closest ties to the bankers. Chrysler revolutionized the way

cars were manufactured, by cutting costs and streamlining production,

and then succeeded Nash as president of Buick. So when Durant reclaimed

ownership of GM, Walter Chrysler began cleaning out his desk and

submitted his resignation to Durant.

Where a vindictive man

might see this as a chance to settle scores, Durant instead pleaded

with Chrysler to stay on. He offered him the unheard of salary $10,000

a month for three years, plus a half million dollar bonus per year,

plus $500,000 worth of GM stock. Durant gave Chrysler full control of

Buick and Chrysler answered to no one except Durant. After three years

Chrysler was one of the richest men in the automotive industry.

Chrysler’s

purchase of Dodge in 1929 was seen as tough luck by many, but Chrysler

managed to move the company forward and pay down the company’s debt,

and he built the Chrysler Building in New York while he was at it. As a

young man Walter Chrysler was considered an expert at tuning locomotive

engines. He never lost his love of engines; where he gladly turned over

day-to-day control of the company in 1936, he still followed the engine

development program almost daily.

Henry Leland had left Cadillac

after the GM purchase. He was encouraged by friends and investors to

found a new car company. Using his prestige, Leland sought to design a

new American luxury car, a car that would rival the Rolls Royce; a car

he named after his favorite President, Abraham Lincoln. Sadly, for all

his innovation on the factory floor and mechanical know-how, the new

cars were seen as behind the times in their styling. The company only

lasted five years under Leland’s leadership. Henry Ford then purchased

Lincoln, some said just to spite Leland. He then gave the company to

his son Edsel, like a toy from a cereal box.

They created an

industry in Detroit second to none and it reached out and touched all

aspects of America. Detroit needed steel from Pittsburgh and Chicago

and coal from Kentucky and West Virginia and rubber from South America

to make tires in Ohio. Moving all of these goods meant more trains for

the railroads. The lure of better-paying industrial jobs lured farm

boys from across the country to the busy streets of Detroit. The loss

of farm labor was made up for by using more machinery, the tractor, the

pump and the generator, which in turn also created more industrial

jobs, which attracted even more farm labor.

Roads were paved,

highways were built, liberating people who, a generation before, had

never gone more than twenty-five miles from their homes. Women

especially were freed from lives trapped in farmhouses. The first Olds

with an automatic transmission was advertised as a “ladies car.” Just

as suddenly, millions who had lived too far from town to further their

education’s were now able to do so. A renaissance occurred in American

life, from an agrarian to an industrial society, all in the space of a

generation because of a small group of tinkerers and machinists and

businessmen from Detroit.

From that time forward Detroit became

the symbol of the great melting pot and the American dream. African

Americans from the South, immigrants from across the world made Detroit

home. The UAW was born in Detroit, free-working people fighting for the

right to organize. They fought all the powers of heaven and Earth, the

government, and the police. They put their lives on the line and in

some cases forfeited them for the dream of a middle class life.

During

the 1960’s, racial injustice combined with police brutality in the form

of the “Tac Squad” and the “Big Four” police units, boiled over into a

riot in Detroit the likes of which hadn’t been seen on American streets

since the Civil War. Forty-three people dead, almost twelve hundred

injured and seven thousand arrests. It was not a noble cause, but it

was necessary as the poor and the oppressed rebelled against their

perceived oppressors.

We, the people of the United States and

the world, owe a debt of gratitude to the ghosts of Detroit. For if

America has a heart, Detroit is where we check our pulse. Detroit was a

city built on autos that built a nation built on autos. Autos built by

blue collar, working-class folks who believed in the American dream as

the dream of prosperity through hard work.

I could go on and

on with page after page of all that has been done wrong, but I’ll stop

here with all that Detroit has done right. For all that she has given

to the world, she’s a city that deserves better from a country that has

forgotten its heroes and its roots, and sees them only as ghosts of the

dead. It is policies that have put us where we are. The brains the

hands and the spirit which changed the world are still there waiting to

be tapped again.

(photo by TooLoose-LeTrek)

Ben Cohen is the editor and founder of The Daily Banter. He lives in Washington DC where he does podcasts, teaches Martial Arts, and tries to be a good father. He would be extremely disturbed if you took him too seriously.