Detroit (AGA

© 1994 Impressions
Thank you for buying this product. It is the result of a great deal of
hard work and careful thought, and we hope that it will give you many hours
of enjoyment.
We are proud of our games, but we know that they can never be perfect. If
you have any ideas about how we can improve, we would be delighted to hear
from you. Please take the time to fill out the enclosed registration card.
We can then add you to our mailing list, and keep you informed of new
products and special offers as they come out.
Please read the file on your game disk entitled README.TXT for information
on changes made and additional features added to DETROIT after this this
manuscript went to press.
Welcome to DETROIT
The Game Interface
The Basics
Starting Off in DETROIT
The Main Factory Screen
Essential Concepts
Setting The Game options
Getting Things Rolling
Summary Of Game Play
The Roads Must Roll: Producing Your First Car
The One To Buy: Creating The Demand and Supplying It.
Shifting Into High Gear
The Car of the Future:Designing New Automobiles
Your Own Personnal Growth Industry: Expansion and Innovation
Charting Your Progress
Feedback: Gauging Your Progress with Reports
Analysis: Finding Trends Over Timw With Graphs
DETROIT begins in the year 1908. The streets of the world are filled with
horse drawn carriages and wagons, and no one has even heard of gas stations
or auto mechanics bills.
You're going to change all that.
You are a bright young entrepreneur with a dream: to use the new
technology of the assembly line to bring the automobile to the average man,
and thereby to build a company that will last a hundred years and reach
every corner of the globe. You start with a single factory, one sales
office, $60,000 in capital funds and the design for a prototype car. From
that foundation, you will guide your company`s expansion, while constantly
working to stay ahead of your competitors by creating better and better
cars for your factories to produce. You`ll make marketing decisions, hire
and fire your employees, build and modernize your factories, invest in
research to stay on the cutting edge of automobile technology, and
incorporate that technology into successful designs for new cars. Your
goal is to see to it that your company survives to the year 2008, and, in
the process, becomes the most successful automobile manufacturer in the
Happy Motoring!
For complete instructions on how to install DETROIT and where to find help
if you need it, please refer to the technical Supplement and Tutorial
The Game Interface
DETROIT is designed to be played equally well with a keyboard and mouse, or
with a standard keyboard alone. Since most players prefer to play with the
mouse this manual assumes that you have one. If you don't, you can find a
complete list of keyboard commands on the included icon card
The Mouse and the Pointer
In general, clicking the left mouse button executes a command, and clicking
the right mouse button causes the game to exit the current screen without
executing any of the commands you may have entered. When you are told to
click on something, assume that you should use the left mouse button unless
the instructions specifically say otherwise.
On every screen that appears in the game, you will see a number of command
buttons, which appear as small rectangular boxes with keywords for various
commands on them. Clicking on a command button is the easiest way to give
instructions to DETROIT. In many cases when you click on a command button,
additional screens or "panels" will pop up on your monitor with more
command buttons or more information, or both. Most of the time the buttons
are obvious but on some of the game screens they have been incorporated
into the scenery. When the pointer is over a hidden button, the pointer
symbol changes from a red "X" to a green arrow, and a message appears in
the message box (which will be described a little furthur on) telling you
what that button does. Most panels will have a button labeled Done or
Exit, which you should click when you want the game to save your changes or
execute your commands and then close the panel. Some panels will offer you
a lettered list of choices, and expect you to highlight the one you want.
You can do this by clicking directly on your choice, or by clicking and
holding down the mouse button while dragging the pointer through the list
until the one you want is reached, then releasing the mouse button.
The Keyboard Input Box
Sometimes, when you select a command button, a small rectangular window
called a keyboard input box will pop up. This happens when DETROIT wants
you to type in some information. If DETROIT is asking you to name
something, such as your company, your save file, or the new car model you
just designed, you should type in the name from the keyboard and press
enter. The first letter of any such entry must be a character, not a space
if you type a space accidentally press Escape and start over. If you want
to edit the text already in the box, use the left arrow key to back up
without erasing the entry. The mouse commands will not work when the
keyboard input box is in use.
Sometimes, when DETROIT is asking you for a number instead of a name, the
use of the keyboard is given as an option instead of a requirement there
will usually be two mouse command buttons nearby, one with a plus sign and
one with a minus sign, which you can use to enter in the requested number.
Clicking on these buttons raises or lowers the value in the box until you
have the number you want. If you click on one of these buttons and hold
the button down, the numbers will scroll rapidly in the indicated
direction. If the number you want is very large, however, you can simply
type the value in from the keyboard. Press Enter when you finish to return
to mouse command mode (the mouse will not work while you are in keyboard
input mode). To exit keyboard input mode without executing your changes,
press the escape key.
The Menu Mover
DETROIT has a special feature to allow you to customize the appearance of
your game to a certain extent. Each of the pop-up panels that appears on
the screen will have a small yellow box in the upper left hand corner. By
clicking on this box, and then clicking elsewhere on the screen, you can
relocate the panel to any position you like. Once changed, the panel will
show up in that position whenever it appears for the rest of the game, even
after saving and restoring. When you begin a completely new game, however,
your settings will be lost.
In a multiplayer game, each player can customize the location of his own
panels separately - the game will remember which arrangement goes with
which player and will bring up the right one at the right time. If you
click on the Menu Mover box and then decide you don`t wish to relocate the
panel after all, just right click and the panel will return to its original
Starting Off in DETROIT
Each time you start up DETROIT, you will be given the option to start a new
game, load a previously saved game to continue playing it, or quit back to
If you have already played and saved a game, you can select the Load button
at this point. You will be given a list of up to twenty saved games to
choose from, each preceded by a letter
Highlight the game you want to load, then click on Use, and your game will
be loaded and ready to play.
If you are starting a new game, click on Start. The computer will present
you with a number of panels that will appear only when you first begin a
game, and not thereafter.
Set the Number of Players
First, you will be asked to set the number of players for the game. Each
game can have up to four players. If there are fewer than four players,
the remaining slots will be played by the computer. The first slot is
automatically set to human and can't be changed. (We have assumed that the
first player will be human; if this is incorrect, we apologize.) Each of
the other three slots can be toggled between computer and human by
Choose a Starting Territory
Next, you will be presented with the territory Map screen. DETROIT divides
the world into sixteen territories: Northern Europe, Southern Europe,
Eastern Europe, Northeastern USA, Southwestern USA, Southeastern USA,
Northwestern USA, Canada, South America, Southeast Asia, Australia, Africa,
China, Japan, India, and the Mid East. Choose one of these territories to
be your starting area by clicking on it. Since DETROIT strives for
historical accuracy, not all starting territories are equal. For your
first game, we recommend starting in North America or Northern Europe.
Later, for more of a challenge, you can choose other territories as your
home base. In general, when lists of territories are displayed, your
starting region will have a check mark beside it.
Name Your Company and Your Car
Once you have selected your starting territory, a keyboard input box will
appear. Type in the name of your company ("Megabux Autos" for example),
and press Enter. your company name may have up to fifteen characters in
it, which may be letters, numbers, or spaces. Then do the same thing to
name your prototype automobile. Once you have baptized your company and
your car, you will be presented with the Main Factory Screen, and can begin
At any point in the game, you may edit DETROIT by pressing Alt-X and
confirming that you wish to edit to DOS. Your current game will not be
automatically saved, however. If you want to keep your current game, use
the disk icon or the file cabinet in Administration to save it before
The Main Factory Screen.
This screen shows a picture of your company's headquarters. At the bottom
of the screen is a wood grain bar with a variety of information on it,
called, simply enough, the Info Bar. Keep an eye on the Info bar, because
there are several useful things on it.
The Info Bar
At the left hand edge of the Info Bar is a square box. When you start a
game, this box will say "Jan 1908". As time progresses, this box will
update to show you the current month and year of your game.
At the right hand edge of the Info Bar is another square box. When you are
on the main factory screen, this box shows a calendar-like grid called the
Month End icon. Clicking on this box ends your turn. When you are on most
other screens, this box displays a silhouette of a factory. Clicking on
this icon returns you to the Main Factory Screen. When you call up a
report or a graph to see your company's progress, this box holds an icon of
a stack of papers under a red arrow. Click on this icon to close the
The center section of the Info bar shows you three things. At the top
center, your companys current funds are displayed, followed by your
company's name. At the bottom centre is the message box. Whenever your
pointer is over a command button, obvious or hidden, a message will appear
in the message box telling you what that button does. Sometimes this may
be your only source of information, so pay attention. Also, if you try to
do something that the game doesn't permit, the message box will say
"Message Present" to let you know that somewhere else on the screen, a
panel has popped up explaining what you did that caused the problem.
The Game Tools
Between the message box and the End Turn/Return to Factory icon are six
smaller icons. The first icon, the floppy disk, allows you to quickly and
easily save your game at any point. The other five "gateway" icons will,
when clicked on, take you instantly to one of the five main game areas as
shown below.
Floppy Disk: Saves your Game
Bar Graph: Takes you to the Administration Office Screen
World Map: Takes you to the Sales/Factory Screen
Tools: Takes you to the Research Screen
Newspaper: Takes you to the Marketing Office Screen
Automobile: Takes you to the Design Screen
Saving Your Game
There are two ways to save your game for later play. The easiest way is to
click once on the disk icon which appears on the info bar. You will be
shown a lettered list of available game slots. Click on the slot you want
to use, and enter the name of the saved game into the keyboard input box
that appears. If you click on an already-occupied slot (one with a name
other than "Empty"), you will overwrite the old game stored there, so be
certain that`s what you want to do before you do it.
Up to twenty games may be saved at one time. Your game file will be saved
in whatever directory DETROIT is being played from. The game in the A slot
will be saved as DETROITA.SAV, the one in the B slot as DETROITB.SAV. and
so on.
The Factory
Embedded in the picture of the factory are six hidden buttons, each
corresponding to one of the buildings in the picture. These buildings are
the places where you will manage the various aspects of your company.
As you move your mouse pointer around on the screen, you will know when you
encounter a button because the pointer will change to a green arrow and a
message will appear in the message box telling you what building you are
pointing to. Clicking on the button takes you inside the building, where
you can get to work running your business. The use of each department will
be covered later in this manual.
Essential Concepts
The two most important concepts in DETROIT are the ones most important to
real businesses everywhere: Time and Money.
Time: Beginning and Ending a Turn
DETROIT is an entirely turn based game and has no real time component.
Game time runs in months and years. Most operating costs are figured
monthly, although a few aspects of the game are figured yearly, such as the
inflation rate. You alone determine when the month is over by clicking on
the Month End icon on the Info Bar. The number of game actions which may
be performed during that month is limited only by your strategy and
After the Month End button has been selected, you will be presented with a
Month End Summary Screen, showing all the possible game actions with a
check mark displayed next to those you have taken. A confirmation box is
also displayed. If you discover that there are further actions you'd like
to take before declaring the month over, click on "No" and you will be
returned to the Main Factory Screen. If you are certain you have done
everything you wish to click on "Yes". If you are playing the game in
single player mode, your companys Profit/Loss report (which will be
explained later) will appear. When you are done reading it, click on the
Close Report icon to begin your next turn. If the game is being played by
more than one human player, a warning flag will appear to give the players
the opportunity to change seats so that the next person`s turn can begin.
As should be obvious, money is very important in DETROIT. Every player
starts with the same $60,000 in capital funds the speed with which that
amount increases (or decreases) is the only measure of how well your
company is doing. Most operating costs are deducted monthly, but some
expenses are subtracted from your company's funds instantly, such as the
cost for opening new sales offices and upgrading factories. Money from car
sales accrues monthly. There are both obvious and easily controlled costs
such as employee wages, and less controllable expenses such as
transportation charges. You should always have more cash on hand than you
think you will need. If your company funds ever drop to zero, you may take
out up to three loans to save your company - but after the third strike,
your company will go bankrupt and the game ends.
Inflation will increase your operating costs as time passes, and wages wil
have to rise as well if you expect to keep and increase your work force.
This will necessitate raising the prices on your cars - but raise them too
fast, and you could wind up with a stockroom full of unsold autos, and a
bankrupt company! If you get into a cash crunch through poor planning, you
can turn to the bank for a loan, but the bank can be stingy and will expect
a high rate of interest on the money it lends.
DETROIT and Reality
DETROIT is, above all else, an entertaining strategy game. We have
endeavoured however to make it as historically accurate as possible without
losing playability. The game takes into account issues such as the change
in demand for different types of cars over the years, historical rates of
inflation and wage increase, and differences in demand from one territory
to another. For the easiest starting conditions, you may want to begin
your business in North America or Northern Europe. For a more difficult
game, you might pick China or Africa as your starting location.
File Management
You can, at any time, save your current game of DETROIT by clicking on the
disk icon. You may also access the save file command, as well as other
file management commands and the game options commands, from the file
cabinet in the Administration office. From the Main Factory Screen click
on Administration, and then click on the picture of the file cabinet at the
right edge of the screen.
Allows you to save your current game. As with saving from the disk icon,
click on the slot to which you want to save the game and enter the name
into the keyboard input box.
Allows you to load a previously saved game to continue playing it. This
option is also available at game start. Your current game will not be
automatically saved. When you restore a saved game, your original save
file remains. If you wish, you can assign the game a new name the next
time you save it, so that you can go back and replay the game from the
earlier save point if you want.
After confirmation, this option will end the current game (without saving
it) and return you to the start of the game.
This option allows you to exit to DOS after confirmation. Your current
game will not automatically be saved before exiting. You can also exit to
DOS at anytime by pressing alt-X.
Setting the Game Options.
Select the Configure option in the file management menu to set the game
options for DETROIT.
Toggles the game's sound effect on and off.
Toggles the game's music on and off.
Toggling this option changes the screen-exit effect from a gradual dissolve
(when ON) to a slow fade (when OFF), which may speed up the transition on
some computers.
Use this option to set the length of time that message panels will remain
on your screen before disappearing. Hold down the leFt mouse button to
scroll rapidly through the settings.
Summary of Game Play
There are several independent facets to DETROIT, all of which work to
determine your company's success. When the game begins, you have a car
design, some money and minimal facilities (one sales office and one factory
in your chosen starting territory). Your first order of business is to get
your prototype built and marketed so that your company has income to rely
on for expansion. The next step is to invest in research, for without
research, you will never have new parts to use in your cars and they'll
quickly become obsolete. Once your technicians have made some advances,
you will need to design new cars, put your factories to work making them,
and get your sales offices selling them.
When your company is securely grounded, you'll want to think about
expanding into new territories: first by opening sales offices supplied by
factories that already exist, and later by setting up new factories to
supply sales offices in distant parts of the world. You will also need to
make decisions along the way about what types of cars to sell where, when
to upgrade your factory facilities, and when to stop production on car
models that are no longer selling well. If you make wise decisions, your
company will grow and prosper - but if you are foolish, bankruptcy lies
around every corner.
The Roads Must Roll: Producing Your First Car
At game start, you have the following assets: one factory and one sales
office in your starting territory; the design for your first car; and
$60,000 in your checking account. What you don`t have is cars to sell, so
your first task will be to build some.
Hiring, Firing, and Paying Your Employees
In order to get your autos built, you need people to work for you.
Employee relations are handled through Administration. Clicking on the
Administration building on the main factory screen brings up the
Administration Office with its four hidden buttons. The use of the File
Management option has already been covered, and the use of Reports and the
Bank will be covered later
Click on the Personnel door to bring up the Personnel Menu. There are four
buttons at the top of the screen (Benefits, Assm, Tech, and Done), a column
showing the total monthly wages paid to all your employees, and two smaller
inset panels where you will do your hiring and set wages.
You can hire two types of employees: Assembly workers (shown as "Assm
workers") to put your cars together, and Technicians, to work in your
Research department. (You don`t need to hire people for your sales offices
they are automatically staffed) In each panel, a column of information
appears. Avail tells you how many workers are available for you to hire.
This number will change from month to month depending on the wages you set.
Idle tells you how many workers you have hired but not assigned to job
sites. Emp tells you how many workers you have who are assigned, and Wages
is the monthly pay rate you have set for them. The subtotal will tell you
how much money you are spending on your employees for that month.
To put more people to work, click on Hire for the type of worker you want.
A keyboard input box will appear. Enter the number of employees you want
to hire, either with the mouse buttons or the keyboard, then click on Wage
to set their monthly pay rate. If you want to lay off some employees,
click on Fire and handle it the same way.
Once you have hired some workers, click on Benefits to set aside a
percentage of the total wages you are paying to be used for benefits for
your workers. You don't have to give your workers benefits but it might be
a good idea.
Putting Your Employees to Work
Once you have people hired, you have to give them work to do. Assembly
workers need to be assigned to Factories, and Technicians need to be
assigned to Research.
There are two different paths you can take to assign your workers.
Assembly workers are assigned through the Factories subpanel in the
Sales/Factories section, and Technicians are assigned through the research
Menu panel. On the Research screen. In addition, you can access either of
these two screens directly from the personnel panel. Either way, you end
up at the same set of screens. If you are assigning new employees, the
personnel screen is the most direct, but if you are shifting your employee
assignments around, you may find it more conveinient to go straight to the
appropriate area from the Main Factory screen.
If you enter the Sales/Factories screen from the Main Factory, you will be
shown the Territory Map. Click on the territory to which you want to
assign factory workers. There will be a separate Sales/Factories panel for
each of the sixteen world territories in DETROIT. If you enter the
Sales/Factories screen from the Personnel screen, the panel for your
starting territory will automatically show up.
To assign workers to your factory, first be sure that you are in the
correct territory screen. At the start, the panel for your starting
territory should show one sales office in the Sales box and a level one
factory in the Factory box. DETROIT allows you to have only one factory
per territory - the number indicates how modern your factory is, not how
many of them you have in that area.
Click on Detail in the Factories box. This panel allows you to start,
stop, and modify your assembly lines. Click on one of the assembly lines
to highlight it, then click Model. A panel will pop up showing a list of
your current car models. Highlight the model you want on that line (your
prototype is your only option at the start) and then click Use. That model
will show up on the selected assembly line. Next, click Assign, and a
keyboard input box will appear. Enter in the number of workers you want to
start working on that line. (The maximum number you can assign to a single
line is two hundred and fifty five.) Repeat this process for each assekmbly
line you want to get running. If you want to shift your workers around,
highlight an assembly line and click on Free. Enter in the number of
workers you want to free up by taking them off that line. Once the workers
have heen freed up, you can reassign them to another line with the Assign
button. If you want to stop one of your assembly lines entirely, click on
Stop. The use of the rest of the buttons on the Factory panel will be
explained later.
When you have opened sales offices or set up a factory in more than one
territory, you can use the Prev and Next buttons on the Sales/Factory panel
to cycle through the sixteen territories until you find the one you want to
adjust. Clicking on List will show you how many sales offices you have in
each territory, and what level factory, if any, is there.
Once you've staffed your factory with workers, you want do the same thing
for your Research department by assigning your newly hired Technicians to
various projects. If you are already in the Personnel Menu, click on Tech
to bring up the Research Menu. If you are at the Main Factory screen,
click on the Research building to bring up the Research screen, then click
on the picture of the lab technician to access the Research Menu. There
are a total of seven hidden buttons on the Research screen
When you access the Research Menu either through Personnel or through
Research, a panel will pop up showing a list of the seven systems and parts
that go into one of your cars: engines, brakes, suspension, cooling
systems, body design, safety features, and luxury options. You can assign
Technicians to do research on any or all of them.

Highlight the part you want to be researched, then click on Assign. Set
the number of Technicians for each research department with the keyboard
input box in the same way you assigned Assembly Workers to your factory.
(The maximum number you can assign is to one project is two hundred and
When you click on done for each part, a check mark will automatically
appear in the box by that part on the main Research panel If, later on, you
want to stop research on that part, you can manually toggle off the check
box by clicking on it. Even if there are Technicians assigned to the part,
no research will take place unless the check mark appears If you want to
shift your Technicians around, highlight one of the parts, and click on
Free to free up workers by taking them off that project They can then be
reassigned to a different department with the Assign button
The One To Buy: Creating the Demand and Supplying It.
Now that your factories are rolling, you have to do something to let people
know that you have cars for sale, and get them interested in buying. You
also have to see to it that your dealers have cars to sell to them. In
other words, you have to market your wares, and get them out to the lot so
they can be bought.
Selling Your Cars
From the Main Factory Screen, click on the Marketing building. The
Marketing Office screen will appear, with the Info Bar at the bottom. You
have several choices for what media to use to advertise your autos, but not
all of them are available at the start. In order to advertise on Radio and
Television, you'll have to wait until they've been invented.
There are six hidden buttons on the Advertising Screen. Five are your
marketing options, and the sixth brings up a quick reference Marketing List
The Marketing List will give you a summary of the advertising expenditures
you`ve set for each territory. Clicking on Prev and Next will let you
cycle through the territories. Marketing decisions must be made separately
for each territory in which you are trying to sell cars.
Clicking on Billboards or Sports will bring up a keyboard input box with
plus and Minus buttons. There is a minimum cost associated with each
choice, and the price will increase over time as inflation takes its toll.
Clicking on the plus button will cause the minimum amount to show up in the
window. If you don't want to spend that much, either click on the minus
button to change the amount back to zero, or right click to exit the panel,
and go in search of more economical advertising medium.
Magazines, Radio, and Television are slightly different. Clicking on these
options will get you a list of various specialty markets in which you can
advertise your cars. In Magazines for example you could choose to target
Sports publications, or Women's magazines, or any of the others. For Radio
and Television, you can decide what kinds of programs you want to air your
commercials on. Highlight the publication or program area of your choice,
and click on it. You will get a keyboard input box like the one for the
other three options, which can be dealt with in the same way. You can't
target specific models to specific markets, however there is no way to
advertise just your sports cars in sporting magazines, or just your family
wagons on television sitcoms.
Advertising costs, like most costs, are deducted from your funds at the end
of each month.
Getting the Cars to the Buyers
Now that your clever advertising campaigns have stirred up public interest,
you have to get those cars into the showrooms.
From the Main Factory Screen, click on the Sales/Factories building. The
Territory Map will appear, with icons indicating where you have opened
sales offices or factories. Sales offices are represented by a light blue
building icon, with a number showing how many offices are open, and
factories are represented by a black building icon where the number
represents the factories level. At the start, you will see one of each
icon in your starting territory (Refer to Territory Screen to see how the
territory map would look with a sales office and factory in each territory)
Click on the territory for which you want to adjust your sales offices or
your factory. The Sales Offices and Factories panels will appear. (You
saw these earlier when you were assigning your assembIy workers and getting
the assembly lines rolling. As explained before, you can also get to these
panels through Administration: Personnel, if you choose.) The Next and
Prev buttons on this panel allow you to cycle through the territories.
In the Office panel, click on Detail. A screen will pop up showing you a
list of models and prices, with a number of command buttons. Your
prototype will appear in the first slot, highlighted. There are two things
you need to do to get your cars to the dealers: the first is to establish
supply lines from your factories so the cars will be shipped, and the
second is to set the price. Both of these things are done from the Office
Detail panel.
A single factory in one territory can supply sales offices in a number of
other territories, if it is making enough cars. When you begin the game
you will have only one factory and one sales office, both in the same
territory. Click on Supply Line. You will notice that you can have up to
three supply lines for each territory, and that your starting territory is
listed in the first slot. This shows that you already have one supply line
automatically running from your factory in your starting territory to your
sales office there. Any time you have a factory and a sales office in the
same territory, that factory automatically becomes the first supply line
for that office. Thus you do not need to do anvthing to set up the supply
line for your first sales office. When you have factories and sales
offices to several territories, arranging supply lines becomes a more
complicated matter. This will be covered later, in the section on
expanding your company.
Setting a good price for your cars is crucial to your company's success, so
DETROIT gives you a number of options for pricing your automobiles.
Pricing strategies must be set individually for each territory. Make sure
you are on the right panel before you start, then click on Office Detail
Highlight one of your current production models from the lettered list,
then click Price. A keyboard input box will appear, with a number of
command buttons nearby. This panel automatically appears in the Single
pricing mode, which allows you to set the price for a single model of car
in a single area. The other three modes (Model, Territory, and Global) are
useful only after you have multiple models of cars being sold in several
territories, so they will be covered in the section on expanding your
Use either the plus and minus mouse command keys or direct keyboard input
to specify the price in dollars for the selected model. Click Done or
press Enter when finished. on the displayed list of production models, the
price will appear next to the model name and the box will turn into a check
mark. As long as the check mark is toggled on, that model will be sold at
that price in that location. If you decide not to sell that model from
that showroom, click on the check mark to toggle it back into a box, and
that car will no longer be offered for sale in that territory.
If your factory is building cars which are selling, and your company is
operating at a profit you're off to a good start. It's time to think about
what your next product is going to be, and to start extending your
company's reach.
The Car of the future: Designing New Automobiles
Your prototype, great car though it is, won't stay in style forever. Your
company is going to have to come up with something new to offer consumers
if you want it to last more than a few years. Here's where your investment
in Research pays off.
Obtaining New Technology
If you have invested in Research, sooner or later your Technicians will
come up with some new automobile technology. When they do, at the start of
the month a panel will appear informing you that new developments have been
made. To find out what your people have come up with you can go to
Research and call up the Systems Details panels. To see what the new part
looks like, and to put it into a new car, you need to head over to your
Design department.
Designing a New Car
From the Main Factory Screen, click on the Design building. The first page
of the design worksheet will appear with your prototype car design
displayed. There are two pages to each car design, the first for designing
the body and look of the car, and the second, click on functional
components that will make it run. To get from the first page to the
second, click on Part. On the second page, click on Body to return to the
first page. To begin an entirely new design, go to the first design page
and click on New.

The first design page shows you a summary of the components in the design
for each car, and has command buttons to let you page through your current
designs or load an old design from the Archives (the use of the Archives
will be explained later). You can have up to sixteen current designs at a
time. A picture of the car currently being worked on appears on the right
side of the screen to the upper right hand corner of this inset display
will be either the word "New" indicating that this design is in
development, or a number such as "1/16" to indicate which of your sixteen
current designs you are presently looking at.
Most of the actual design work is done on the second page of the design
worksheet. The one exception to this is the body of the car, which you
specify on the first page. All other components the engine, brakes,
suspension, cooling system, and luxury and safety features - are added from
the second page.
On the right hand side of the first page are the buttons that allow you to
design the body for your new car. First, you need to decide what type of
car you're building - a sports car? A van? A compact? Click on the Type
button to cycle through your options. A basic body design for each vehicle
type will be presented. After a basic type has been selected, you can then
modify any or all of the three body sections (front, middle, and back)
until the car is exactly to your liking. Highlight the section of the body
you want to design, then click on the plus and minus keys to cycle through
your options. Mix and match them to until you have the exact combination
you want. Use the Color button to select a color scheme for your new
When you are happy with the body of your vehicle click on Part to start
designing the rest of it. The second page of the design screen has four
boxes, one each for the Engine, Brakes, Suspension, and Cooling System. In
each box, click on the plus and minus keys to cycle through the available
choices for each part. If you want more information about a particular
component click on Detail to pop up a screen with the design
To add luxury or safety options to the new car, click on either the Luxury
or Safety button. A list will pop up, showing which of each of these
options has beemn added to the design. If you are starting from scratch,
these lists will be empty. the small inset panel at the bottom allows you
to cycle through the available options with the plus and minus keys. Click
on Detail to get more information about the feature. To add an option to
the car, highlight one of the lettered slots and click Use. The option
that appears in the inset window will be added to the design. Likewise, if
you highlight an option on the list and click Remove, that option will be
taken off the car. You can add up to ten luxury and five safety options to
one car. To return to the first page of the design, click on Body.
Your design options will be very limited at first, until your Technicians
provide you with enough new components to give you a decent selection to
choose from.
Once you have more than one design on the boards, you can click on Prev and
Next on the first page of the design sheet to cycle through your current
designs. When you fill up all of the sixteen available slots with car
designs, you will have to make room for more, either by saving some of your
current designs to the Archives or by getting rid of some designs. To file
a design away in the Archives, click on Put, and the current design will be
saved directly to the Archives. If you are unhappy with a design and want
to get rid of it completely, click on Del, and after confirmation the
current car design will be deleted permanently from your records.
Sometimes, you may want to make modifications on an already existing
design. If the design is current, you can simply make whatever changes you
like, then save the new design under a different name. If the old design
has been saved in the Archives, click on Get. The first page of the
Archive records will appear. Click on the design you want, then click on
Use, and the design will be put back onto the current list, assuming there
is room for it (Click on Prev/Next on the Archive panel to page through the
rest of the Archive records if the one you want isnt on the first page.)
To see what a sample car design looks like, look at the design
specifications for your prototype This is a very simple car, of the "Family
Sedan" type. By clicking on Part, you can see that the only components the
car has are the engine - a four-cylinder in line - and a simple hand brake.
It has no suspension or cooling system, and no luxuries or safety devices.
Theres a lot of room for improvement.
Testing Your New Design
When you have designed a new car to your satisfaction, return to the first
page of the design worksheet, and click Make. This directs your
Technicians to make and test a prototype of your new automobile. A
keyboard input box will pop up to allow you to name your new design, and
ask you to confirm your decision to have the test car built. Then your
test drivers will start putting the new car through its paces to check its
The testing screen allows you to choose which of five performance checks
you want to put your new car through, and to watch the car as it is tested.
Initially, the viewscreen at the top right shows an interference pattern.
Once you start testing the car, this window allows you to watch the testing
as it progresses. The five available testing categories are Acceleration,
Braking, Handling, Capacity, and Fuel Economy. To order a test, click on
the test name. The cost of the test will be added to the computer printout
in the lower right quarter of the screen. Each test costs a different
amount. To select all of the tests at once, click on Test All.
When you have selected the tests you want, click on the button that says
Run. The cost for materials and testing will be deducted from your funds,
and the viewscreen will show you the car as it is put through its paces.
If you don't wish to watch the tests as they take place, left click on the
viewscreen as each test begins and the results will be instantly displayed.
The testing results are read as follows;
shows you how long in seconds it takes the car to go from zero to sixty
miles per hour.
tells you the distance required in feet for the car to go from seventy
miles per hour to a full stop.
Road Handling:
gives you the number of gees at which the car stops holding the road.
"Seating" tells you the number of people the car can carry, and "Cargo" is
the holding space the vehicle has in cubic feet.
Fuel Economy:
shows the miles per gallon of gasoline the car get in the city and on the
The Overall rating of the car is a percentage value showing how well that
car is predicted to market as that type of vehicle. Different types of
cars will require different emphasis in design: a van needs more cargo
space than a sports car, while a sports car requires better acceleration
than a van.
Using the Archives
You can have up to sixteen current car designs in production at any time.
If you exceed that number, but still want to hang onto your older designs
you will have to store them in the Archives.
To reach the Archives, go to the Main factory Screen and click on the
Archives building in the upper left part of the screen. The Archives panel
will appear. Click on Put, and you will see a list of your sixteen current
designs. To move one to the archives, highlight it, then click on Use, and
the design will be taken out of the current list and stored.
You can also bring an older design back from the archives if you discover a
need for it. From the main archive panel, click on Get. A list of the
first twenty archived designs will appear. You can archive a total of one
hundred designs. To see the rest of the archives list, click on Prev and
Next to cycle through the pages of the archives until you find the one you
want. When you`ve located the design to be loaded, highlight it, then
click on Use. The current design list will appear. Highlight an empty
slot and click on Use in that window. The selected archive design will
move to the current list. If you highlight an occupied slot on the current
list and click Use, the selected current design and the selected archived
design will swap places.
If you should happen to use up all the space in your archives, or if you
just want to keep your archive lists short and easy to handle, click on
Delete from the main archives panel. The archived design list will appear.
Highlight the design you want to get rid of and click Use. The game will
ask you to confirm your instruction; if you are sure you won't ever want
that design again, click Yes. Once a design is deleted from the archive,
it's gone forever, so be sure you`re finished with it before you confirm.
Your Own Personal Growth Industry: Expansion and Innovation
Opening up New Territories
Setting up sales offices and factories in new territories greatly adds to
the complexity of your game, and is essential. For your company's
continued growth since a factory can supply sales offices in more than one
territory if it is producing enough cars, you probably want to start your
expansion by adding sales offices in territories close to your starting
territory. The farther away from the factory your sales offices are, the
higher the hidden incidental costs such as transportation fees will be for
getting the cars to the showrooms. Because of this, it might not be a good
idea to try to supply all your worldwide sales offices from a single
To open a new sales office, go to the Main Factory Screen and click on the
Sales/Factories building. The Territory Map will appear. Click on the
Territory you want to expand into. The Sales and Factory panels for that
territory will appear. In the Sales Offices section, click on Open The
cost of opening the new office will be immediately deducted from your
companys funds. If you want to shut down a sales office, click on Close.
Closing a sales Office is not free - it costs one-half of what it cost to
establish the office in the first place, and as with Open the money is
deducted immediately. Therefore,the game will ask you to confirm any
office openings or closings. Since the deduction from your companys funds
takes place straight away and cant be undone, decisions to open and close
offices should be made with some care. You can open up to ten sales
offices in any one territory. New icons will appear on the territory map
each time you establish a sales office or factory in a new territory.
Opening a new factory is very similar to opening up a new sales office.
Click on Raise to establish a Level One factory in that territory.
Clicking on Raise again will improve the level of your factory by one. A
higher level factory is more efficient, but expansion gets progressively
more expensive as the factory level increases. Clicking on Lower will
downsize your factory at a cost of one third the price of expansion. As
with sales offices, costs for improving or downsizing your factories are
immediately deducted from your company funds
Pricing and Supply on a Global Scale
Once you have more than one model of car to sell, more than one factory
producing your cars, and more than one territory to sell them in, pricing
and supply become more complicated. The possible strategies for arranging
your supply lines and setting your price strategies multiply enormously.
To set up new supply lines for a territory, or change existing ones, go to
the Main Factory Screen and click on the Sales/Factories building. The
Territory Map will appear. Click on the territory where you want to adjust
your suppIy lines or prices. The Sales Office/Factory panel will appear.
Each territory has its own panel, so make sure you're in the right
territory before you start making changes. If you wind up in the wrong
territory, clicking on Prev and Next will allow you to cycle through
territories until you find the right one. Clicking on List from any
territory panel will give you a summary of the number of sales offices and
the level of the factory, if any, in each territory.
In the Sales Offices section of the panel, click on Detail, then on Supply
Line to get the three slot lettered list of supply lines for that office.
If there is no factory in your new sales area, you will have to arrange to
have the cars shipped in from elsewhere. Click on one of the three lines
to highlight it, then click on the plus and minus buttons to cycle through
the available territories until you find the one you want. Naturally, you
have to have a factory established in a territory before you can use it as
a supply line. To stop shipping cars, cycle through the territories until
you find the "None" option. You may remove the automatic in territory
supply line from a factory in the same area, if you wish.
When your supply lines are set, click on Price. You will have to set the
initiqal price for each separate model of car you want to sell from that
office using Single mode as described earlier. The other three buttons can
be used to make more sweeping changes in the prices of your cars.
Clicking on Model allows you to raise or lower the cost of a particular
model of car in every territory. It doesn't matter which territory panel
you are currently using - the change will be applied everywhere that model
is being sold. Use the plus and minus keys or direct keyboard input to
change the price on that model by percentage of the current cost, not by
dollar amount. To lower the price, click on the minus key until you get
negative numbers.
Clicking on Territory changes the price for every model of car being sold
in the current territory. Again, the change is in percentage of the
current prices, not dollar amount. Similarly clicking on Global allows you
to adjust the prices on every model in every territory.
Note that if you are selling a particular model of car in a certain
territory there must be a supply line going to that territory from a
factory which is making that particular model of car. It`s pointless to
tell your salespeople to sell "Megabux Electras" if none of the factories
that are supplying them with cars are producing Electras.
Once you've supplied your new sales area with cars, and set the pricing
strategy, be sure to remember to head over to marketing and spend some
advertising money in that new territory, if you want your cars to sell.
Using the Bank
The bank is the place to go if you are expecting a cash crunch, are looking
to finance a costly new expansion, or want to put some of your money away
to accrue interest for a while. To get to the bank, go to the Main Factory
Screen and click on Administration. When the Administration Office
appears, click on the phone. The banking panel will pop up.
The top section of the panel shows your current funds (in Checking), your
funds in savings, and the current yearly interest rate accrued on your
savings. (Your checking account does not earn interest). To transfer
money from checking to savings, click on Check. A keyboard input box will
appear for you to enter the amount of money you want to transfer. Likewise
to shift money from savings to checking, click on Save and enter the
The bottom section of the panel shows your current loans, and the yearly
interest rate the bank will charge you for the use of its money. To take
out a loan, click on Loan and enter the amount in the keyboard input box.
If the bank agrees to the loan, the money will be added to your checking
account. If the loan is denied, the box will clear when you press enter,
and you`ll have to try again. Click on Term to set the length of time you
want the loan to cover. This will determine the size of your monthly
The minimum payment on your loan will be deducted from your checking
account automatically at the end of each month. If you want to pay more
than the minimum in a given month, click on Repay and enter in the amount.
It will be deducted from your checking account and the amount remaining on
your loan will be reduced.
So by now you've hired people, put them to work in the factories and in
your research department, advertised your product, set the price tag, and
got the cars shipped to the showroom. Maybe you've even expanded your
operations already. Your cars are selling, but you need to plan for the
future. Or perhaps your cars aren't selling, and you need to figure out
where the probIem lies. Your trusty staff of researchers and accountants
stands ready to assist your business decisions with a wide variety of
reports and graphs to show you just how well your company is or isn't
doing. (Note: Some additional reports and graphs may have been added to
DETROIT since this document went to press. Please see the Technical
Supplement and Tutorial booklet for details.)
Feedback: Gauging Your Progress with Reports.
Reports give you a picture of how well your company is doing in the short
term. Each report shows the figures for the month just past, and only for
that one month. To get reports, enter the Administration Office screen and
click on the pile of papers in the center of the desk. (if you do this in
the first month, you will see that there are no reports available, since
you have not started production yet). A menu of available reports in the
first two columns and graphs in the third one. Click on one of the report
buttons to bring up that report. All reports are free with the exception
of the Demand report, which must be commisioned from an outside research
agency and paid for when ordered. Click on the stack of papers under the
red arrow pictured at the right end of the info bar to close a particular
report or graph.
Many of the reports and graphs have word-toggles you can click on to obtain
more information or change the way the information is presented for
viewing. all text that appears in red is associated with a toggle and may
be clicked on to change the display. When you are finished reading
reports, click on Done to return to the Administration Office.
The Profit/Loss Report is the most basic indicator of your company`s
health. In addition to being available through the Report menu, these
figures are automatically presented to you at the start of each new month.
The first column shows you your company's itemized expenses, while the
second shows your income by territory. Click on Income to toggle your view
of your profits between model and territory.
This report gives you detailed information on how well you are doing in
each territory in which you have an installation. Click on the territory
name to cycle through your territories (only those areas in which you have
sales offices or factories will appear) There are five columns of
information on this screen, each of which can be toggled between two
different sets of information. To toggle the column, click on the column
First column: model name/model type
Second coIumn: the number of assembly lines making each car/the price of
the car in that territory
Third column: the number of cars built in that territory in the previous
month/the labour costs for making each car
Fourth column: the number of cars sold in that territory in the previous
month/the material costs for making each car.
Fifth column: the number of cars in stock in that territory/ the profit
made on each car at the current price
This report tells you how well each of your models is doing in each
territory. Click on the model name to cycle through your current models.
There are four columns of information on this sheet, each of which can be
toggled between two sets of information. To toggle the column, click on
the column header. (The column titled "Territory" does not toggle)
Second column: the number of assembly lines making each car/ the price of
the car in that territory.
Third column: the number of cars built in that territory in the previous
month / the labour costs for making each car.
Fourth column: the number of cars sold in that territory in the previous
month / the materials costs for making each car
Fifth column: the number of cars in stock in that territory/ the profit
made on each car at the current price
This report is your main source of information on how well your competition
is doing. from this report you can see the expenses, income, and profit or
loss margin for each of your three competitors. (There are no toggles on
this screen.)
This report shows your marketing expenses arranged by territory. Click on
the territory name to cycle through the territories. Click on the word
"Territory" to toggle the display between the sums for each territory to
the total sums for all territories.
This report is very similar to Market T, except that your marketing
expenses are arranged by media type. Click on the media type to cycle
through the available media. Click on the word "Media" to toggle the
dispIay between the sums for each media type to the total sums for all
This report is the only report that costs you money to acquire. To obtain
a demand report, select a car model to get a report on by clicking on it,
then click Use. You may get a demand report on only one model per month.
Select the territories you wish a report on by clicking on them. You may
select as many territories as you like, at a cost of $100 per territory.
Click on Use to order the report. The game will ask you to confirm the
order. when you do so the cost will be immediately deducted from your
company's funds and the demand report will appear on the screen showing you
how many cars could have been sold in that territory in the past month.
The demand in a particular territory may change from one month to the next
based on your competitor's actions, your own advertising, or other factors.
Once ordered, the demand report cannot be changed until the next month -
you may not change the model type or add to or subtract from the
territories list.
The second and subsequent times you order a demand report, you will first
be given the option of ordering a New report or viewing the last demand
report you purchased (click on Old). Only the last report is available.
This report shows you the supply lines for each of your sales offices.
Click on the territory name to cycle through the territories. By clicking
on any column heading you can change the display to show you the
transportation costs involved in maintaining each supply line.
Analysis: Finding Trends Over Time with Graphs
Graphs allow you to gauge your company's progress over an extended period.
The information available in the graphs is more concise and therefore less
detailed than the information you can get from reports. Graphs can be
accessed from the same place reports are accessed. Click on one of the
buttons in the third column of the Reports/Graphs menu to bring up a graph.
Click on the stack of papers icon at the right side of the info bar to
return to the Reports/Graphs menu, and click Done to return to the
Administration Office
The vertical axis on this graph shows you your profits for each month,
compared to those of your competitors. By clicking on the scale indicator
for the vertical axis, you can toggle the scale for a range of settings
from tens of dollars to hundreds of millions of dollars. Only those scales
which are appropriate for the profit levels shown will be available,
however, so if the most any company made in any month shown was $2000, you
will not be able to change the scale to anything greater than thousands of
The horizontal axis displays seven months of profit records. A year's
worth of records are kept stored at a time. To access months not currently
visible on the screen, click on the first or last month displayed.
The vertical axis on this graph shows you how many cars you and your
competitors built each month. The vertical axis scale can be changed to
range from tens to hundreds of millions of cars produced per month. Only
those scales which are appropriate for the production levels shown will be
available, however, so if no company produced more than sixty cars in any
month shown, the scale will not go above tens of cars.
As with profits, the horizontal axis displays seven months worth of
production records, and up to a year can be viewed by clicking on the first
or last month displayed to scroll the printout.
The vertical axis on this graph shows you what your income from car sales
is for each month, compared to those of your competitors. The numbers
shown are for total income over all models of cars being produced. The
vertical axis scale can be changed to range from tens to hundreds of
millions of dollars in sales per month. Only those scales which are
appropriate for the sales levels shown will be available.
As with profits, the horizontal axis displays seven months' worth of sales
records, and up to a year can be viewed by clicking on the first or last
month displayed to scroll the printout.
Subsys Level
This graph shows you what level of advancement your automobile subsystems
have achieved, relative to those of your competitors. The vertical axis
shows the percentage of the level possible in the game that you have
reached for each of the seven systems. There is a built in limit to the
rate at which you can acquire new technology through research, so you
should not expect to reach 100% quickly, even if you put maximum investment
into your research department.
The horizontal bar shows each of the seven systems, abbreviated as follows:
ENG = Engines, BRA = Brakes, SUS = Suspension, COO = Cooling, BOD = Bodies,
SAF = Safety, and LUX = Luxury.
Typed by SHARD - DTL
To the man on the street in the late nineteenth century, it was clear that
the horse was in all ways superior to the automobile. The horse was almost
a member of the family. It was friendly, hard working and reproduced
itself, could survive on nothing more than grass and water and, if its
owner was drunk or ill could find its own way home without guidance. The
automobile by compasirson was noisy, unreliable, smelly, dangerous, and
constantly in need of repair. It also required decent roads to run on,
which were in short supply in the Unites States at the turn of the century.
Yet, despite its obvious shortcomings, within a hundred years of its
invention the automobile totally replaced the horse as a means of
transportation in most Western nations. In the process, it caused major
changes in society, changes unequaled by any other technological innovation
of its time. It opened doors between deeply divided urban and agrarian
communities, single handedly created the suburb, brought about the demise
of the blacksmith and the coachmaker, greatly expanded the tourist industry
by giving the average worker unprecedented freedom to travel, turned
petroleum into a critical commodity, and spawned a host of service
industries devoted to automobile care and maintenance. In short, it
redesigned the face of every nation to which it came, and no nation more
than the United States.
Although the automobile originated in Europe, it was in the United States
that it first reached its full potential. From the year that the US
overtook France as the leading producer of automobiles to the time more
than seventy years later when it succumbed to the challenge of Japan,
America was undisputed King of Cars, and the city of Detroit was the place
where the king held court. By the fortunate accident of being the city
closest to the homes of three of the most influential figures in the
history of the American car - Ransom Eli Olds, Henry Ford and William C
Durant - Detroit became the center of the new industry. The city`s history
is inextricably linked with that of the American automobile, sharing its
rise to glory and its fall from grace.
The coining of the word "automobile" preceded the development of the
genuine item. Frenchman Jean Joseph Etienne Lenoir built a two-cycle
internal combustion engine in 1860, and came up with the term (literally,
"It moves by itself") to describe the vehicle he hoped to power with his
engine. The actual automobile ended up being built by a group of men from
another country entirely, using an engine based on Lenoir`s design.
In 1876 a German engineer named Nikolaus August Otto made a critical
breakthrough by successfully modifying Lenoir's two cycle noncompression
power unit into the first modern type four cycle, compressed fuel internal
combustion engine. The four cycle "Silent Otto" as it quickly became
known, was far more powerful and efficient than the two cycle engines built
previously, and had a higher thermodynamic efficiency than the popular
steam engine as well. It was rapidly adopted for small power plants. The
thought of using it to propel a vehicle seemed a natural extension, and two
of Otto's countrymen were soon captivated by the idea.
Benz and Daimler Go into Business
Credit for building the first gasoline engine automobile is generally given
to Karl-Friedrich Benz of Karlsruhe, Germany. He constructed his first car
in 1884 and christened it the Motorwagon. It was a three wheeled vehicle
with a top speed of 10 mph. Two years later Benz was granted a patent for
the world`s first practical automobile.
Only a few months after Benz put his car together, a pair of engineers
working for Nikolaus Otto also built a self-propelled vehicle using Otto`s
engine. Their names were Gottlieb Daimler and William Maybach, and in the
next few years they would be responsible for many significant improvements
on Otto`s basic design. It was Benz, engineering company, however, that
became the first to produce automobiles in the hope of selling them. Up to
that time any vehicles that were built were strictly experimental models,
one of a kind items of interest onlt to their creators. By 1888 Benz had
built a limited number of his cars, but found no buyers. A year later both
Benz and Daimler exhibited their cars at the Paris World Fair, where the
automobiles were received with a remarkable lack of interest. The auto
industry was off to a slow start.
Two years after the disappointing debut at the World Fair, Daimler and
Maybach decided to start making automobiles for sale and formed Daimler
Motoren Gesellschaft together. By that time, Benz had started to find a
limited number of customers for his cars, mostly rich men who regarded them
as expensive toys and curiosities.
Meanwhile, in France, one of the few people who had been intrigued by the
possibilities of the automobile when he viewed it at the Paris World Fair
was a very successful bicycle manufacturer named Armand Peugeot. Peugeot
was an engineer by training, and was intrigued by the idea of a self
propelled vehicle. His first attempt to create one took place in 1889 and
resulted in a steam powered tricycle. Shortly thereafter, he was
approached by a man named Emile Levassor, who was building Daimler engines
in France through a licensing agreement with Gottlieb Daimler. Levassor
tried to sell Peugeot on the overall superiority of the Daimler gasoline
engine as a power unit, and Peugeot, who had been having trouble with his
steamer, was not difficult to convince. Workinhg together, the two men
constructed the first Peugeot gasoline-powered automobile in 1890.
The Automobile Gets Rolling
Peugeot was a good engineer and an even better salesman. To interest the
diffident public in his cars, he entered one in the big Paris to Brest
bicycle race in 1891. The car completed the race at an average speed of 10
mph, and finished dead last. In spite of the late finish, however the
event was a stroke of advertising genius, for it was the first
long-distance journey ever made be an automobile and no one had expected
the vehicle to be able to finish at all. The number of orders for the
Peugeot car soared. By 1893 there was sufficient traffic on the streets of
Paris for the French police to institute the world`s first license plates.
In 1894 an event just for automobiles was held from Paris to Rouen, an 80
mile course. It was more of a publicity stunt than a race; awards were
given for nearly every conceivable category, and some went to cars that
didn`t finish, or didn`t even start! The officials received over 100
entries although only 26 vehicles showed up for the elimination trials.
Seventeen of those qualified and an additional eight were added in later,
making a field of 25. A steam tractor won with a speed of just over 11
mph, but it was disqualified on the grounds that it wasn`t really an
automobile, so the prize went jointly to Peugeot and another carmaker named
The following year, the event became a true race, with the course extended
to 732 miles, and speed and stamina being the only qualities judged.
Twenty cars started, of which nine finished Those entries employing the
more durable gasoline engines badly outclassed the six steam powered cars
entered, a sign of things to come. The winning time was 48 hours and 48
minutes, or an average speed of about 15 mph.
The New Century
By the time of the turn of the century, the automotive industry was gaining
momentum. In 1902, France produced a total of 12,000 cars, a major
increase over the few hundred built only seven years previous. At the
Paris motor Show that year, a car was exhibited that was capable of speeds
up to 50 mph. The technology of the automobile was being rapidly improved,
with old designs being perfected and new ones appearing yearly. One, two,
four, and six cylinder engines were made, and the first V8 engine was built
for the 1903 Paris-Madrid race.
Travel by car at the turn of the century, while it might have been
enjoyable to those with a sense of adventure, was far from a pleasure trip.
The only matter of real concern to early car designers was that the vehicle
have a reliable propulsion system, and all other issues were secondary.
Automobiles lacked even the most rudimentary safety features, and were all
open topped, offering no protection from the weather. European roads were
in a sorry state of disrepair (though not by comparison to American roads
of the time, it must be admitted) and road maps were non-existent.
There were no service stations or garages. Motorists carried extra
gasoline in cans in the back of the car and, if the driver forgot to fill
his reserves, he might have to walk many miles to find a chemist carrying
fuel fit for his vehicle. There were no schools that taught driving and no
standard rules of the road - learning to drive was a trial and error
process, mostly error. No set of standard controls existed; most cars had
a steering wheel and a brake lever, and little else, and the location of
those two obJects varied from car to car. To make matters worse most early
motorists were rich men with next to no knowledge of mechanics. They had
little idea how to maintain or repair their cars when things went wrong,
which they often did.
The development of the automobile took a somewhat different path in the
United States than it did in Europe. The largest single factor affecting
this was the condition of American roads, which was abominable. While
Europe had a long standing coach trade, resulting in reasonably good roads
in most countries, the U.S. was largely agrarian at that time. At the
turn of the century, only 171 miles of paved road existed in the entire
Americas First Automakers
The Philadelphia Exposition of 1876 was a notable event for American
inventors. Two devices were publicly displayed for the first time: one
was the telephone, by Mr. Alexander Bell, and the other was a two cycle
gasoline engine built by Mr. George Brayton. A patent attorney named
George B. Selden saw the device, conceived of the idea of using it to
propel a vehicle, and submitted the first patent application for his
concept in 1879. Selden`s car ran on liquid fuel and featured a clutch and
a steering wheel. The patent was granted in 1895 after many revisions;
Selden had delayed deliberatly hoping to keep the patent viable for as long
as possible, but he became afraid to wait any longer because other
inventors were rapidly conceiving automobile designs of their own.
Although he was granted the patent, there is no evidence that Selden built
any cars from his design until many years later.
If you lived in Lansing Michigan in 1886 and happened to be outside after
dark on a summer`s day, you might have caught a glimpse of a machinist
named Ransom Eli Olds running his three wheeled steam car on the city
streets. Olds, fearing embarrassment, always tested his early steamers at
night when he hoped no one would be watching to see them break down. In
1890 he built one with four wheels and sold it to a customer in India, but
the car was lost at sea and therefore never delivered.
An issue of Scientific American from the same year carried an article about
another new invention: an electric car built by William Morrison of Des
Moines, Iowa that could carry up to seven people. The publicity from the
article generated over 16,000 inquiries. It was an early indicator of the
size of the potential market for a practical car in America, but Morrison
wasn't interested in exploiting it - as late as 1907 he declared, "I
wouldn`t give ten cents for an automobile for my own use.
John W. Lamber of Ohio constructed and ran a three wheeled gasoline
powered vehicle in 1891. The inventor offered to build them for sale to
anyone who wanted one, but he found no buyers. A year later Gottfried
Schloemer from Milwaukee built another gasoline engine and installed it in
a buggy; today, the car resides in a Milwaukee museum and is still in
working order. But since neither of these prototypes was entirely
successful, oficial credit for building Americas first gasoline powered
internal combustion automobile is usually given to one of two parties:
either Elwood Haynes with his partners, the Apperson brothers, or the team
of Charles and Frank Duryea, brothers from Springfield, Massachusetts.
Both sets of inventors built their cars in 1894, but the Duryeas took
things a step further in the next year, setting up a company to build
automobiles for sale. The vehicles were still more curiosities than
anything else, however a year after the brothers founded their company, the
Barnum & Bailey Circus put a Duryea Motor Wagon on display as part of their
Freak Show, where it drew large crowds.
The Duryea Motor Company, although the first automaker to be even a limited
success, lasted only three years and built a total of thirteen cars. Three
years after the founding of the company, the brothers quarreled, and then
closed down their joint business. The rift between the Duryea brothers
never closed, and they carried their grudges against each other to their
The First American Auto Races
H. H. Kohlsaat, publisher of the Chicago Times-Herald, was looking for a
publicity stunt. Inspired by the Paris-Rouen and Paris-Brest races held in
France, he decided to sponsor America`s first automobile race in his home
city in the year 1895. He hoped to give positive exposure to the new
horseless carriage and, not incidentally, to his paper. Kohlsaat staged
the race on Thanksgiving day, with several inches of slushy snow on the
ground, over a course of 54 miles, and offered a prize of $5,000. Six cars
were entered: the Duryea brothers buggy. powered by a one cylinder
gasoline engine; an Electrobat electric car; William Morrisons electric
carriage; and three cars based on the German Benz. The only entrants who
finished were the Duryea and one of the Benz cars. Although large crowds
turned out to watch the start of the race, it required eleven hours for the
winning Duryea to complete the distance - by which time nearly everyone had
gone home.
The second auto race in the States took place six months later, in May
1896, and was also sponsored by a publication - this time, the New York
magazine Cosmopolitan. The course traveled from New York City to
Irvington, and of the six starters, only the Duryea finished. The American
public was less than impressed with the automobile - the bicyclists who
left at the same time as the cars arrived ahead of them.
Detroits First Automobile
Although the general public was not exactly enthusiastic about the
"horseless carriage" in 1896 the men who were building them kept right on
doing so. In the same year as the disastrous New York - Irvinton race, an
inventor named Charles Brady King drove his gasoline-powered buggy on the
streets of the midwestern city of Detroit, Michigan. Following behind him
on a bicycle was a young electrical engineer formerly employed by the
Edison company. His name was Henry Ford, and twenty years later his name
would be synonymous with the popular car.
Ford was already hard at work building an automobile of his own, and three
months later he felt ready for a test drive. He then discovered that he
had made a small oversight when he assembled the machine - it was too large
to fit through the door of his basement workshop. With the hard headed
practicality and directness that were to become his trademarks, Ford
grabbed a pickaxe and attacked the door frame. After removing a dozen
bricks or so (and reassuring his anxious landlord), Ford pushed his
Quadricycle out onto the street and took it for a successful spin around
the block. The Quadricycle had a top speed of 20 mph, four times that of
Kings car. Ford sold the vehicle for $200 and used the money to finance
the building of his second car. Many years later, nostalgic, he tracked
down the old Quadricycle and bought it back.
The Steamer Forges Ahead
Although Ford, King and Winton all built successful gasoline powered
automobiles in the late 1890s, it seemed for a time that the steamer would
be the car of choice for the new century. Apart from Alexander Winton, no
one was producing gasoline cars for sale between 1898 and 1900. The Duryea
automobile company, never prolific, folded in 1899, clearing the field for
a different pair of brothers: identical twins Freelan and Francis Stanley.
The Stanley twins were both brilliant inventors, and already wealthy from
the sale of their dryplate photographic process to the Kodak film company.
In 1888 they witnessed a steam powered car in action, and were so impressed
they tried to build one themselves. Their first attempt was a failure, and
they abandoned the project for eight years until they saw another steamer
in 1896. This time they succeeded in reproducing the invention, completing
their first car in 1897. It gave a winning performance in a Boston hill
climbing contest, and prospective buyers swamped the brothers with over 200
orders for the vehicle - a volume they could not possibly fill. As with
Morrisons electric car seven years earlier, the enthusiastic response
indicated that a market for a reliable automobile did exist, if only
someone could produce the right car to tap it.
The Stanley brothers gamely set about trying to acquire enough parts to
build the first hundred of their cars. Before they had gotten seriously
underway, a man named John Walker approached them with a proposal. Walker,
the publisher of Cosmopolitan and the sponsor of the unsuccessful New
York-Irvington race, offered to buy out the Stanleys, business. The
brothers were not eager to sell and so, to discourage Walker, they
requested the ridiculous price of $250,000. To their astonishment, Walker
accepted, and the delighted twins closed the deal.

Walker and his partner, asphalt millionaire Amzi Barber, formed the
Locomobile Company of America in 1899, and began producing Stanley-designed
steamers under the brand name Locomobile. Later that year, William
McKinley became the first president to ride in an automobile, and that
automobile was a Locomobile Steamer. By 1901, half of the 8,000 cars
registered in the U.S. were Locomobiles.
Five years after selling out to Walker, the Stanley brothers decided to
return to the steamer business themselves and bought back their original
factory from Locomobile to produce their new car. Since Locomobile was in
the process of switching over to gasoline engines, they were able to buy
back for just $20,000 everything they had sold five years before for over
ten times that amount. After redesigning their original car just enough to
avoid charges of patent infringement, they introduced the Stanley Steamer,
perhaps the best car of its time for the price.
Francis Stanley was once driving an experimental model on a straight road
near Boston when a policeman stopped him for speeding. When he came before
the judge, Stanley pleaded "not guilty" to the charge of going nearly 60
mph. The judge, incredulous, asked how he could say that in the face of
the evidence, to which Stanley replied, "I plead not guilty to going 60mph.
When I passed the officer my speedometer showed was going 87 mph". The
court fined him $5 and the story made all the papers, generating excellent
publicity. The Stanley Streamer racer that won the Dewar Cup in 1906 was
clocked at an astonishing 127 mph
Unfortunately for the Stanleys and their excellent car, the time of the
steamer was nearly over. Although the Stanley Steamer and another popular
brand, the White Steamer, still had a number of good years ahead of them,
they were on their way out. The White Steamers moment of glory came in
1906 when Teddy Roosevelt became the first American president to drive a
car, and chose a White, and they were also the first official White House
cars, purchased during William Howard Tafts term in office. But, unlike
its presidents at the time, the American public was quickly learning that
it preferred gasoline
Steam, Electric, or Gasoline?
The biggest question for carmakers before 1900 in America was: which power
source was best? Although the gasoline engine would eventually defeat all
others, at the start it was not at all clear that such would be the case.
Both the steam powered and the electric-driven car did very well in America
at the beginning, and car manufacturers produced excellent makes of both
types of automobile around the turn of the century. Locomobile, maker of
steamers, was the largest automobile producer in the country as of 1902,
but just a year later the company dropped its steam engines in favour of
There were several reasons for the ascension of gasoline over steam and
electricity. The first was the discovery of America`s first oil "gusher"
in Spindletop, Texas in 1901, which guaranteed that gasoline would be cheap
and plentiful for many years to come. The second was that both steam and
electricity had problems as power sources which gasoline did not.
The electric automobiles shortcomimgs were the same then as they are today:
limited range and speed, plus the great weight of the large batteries
needed to provide sufficient power Electricity did well in the early years
of motoring, from about 1906 to 1916, because its problems were not so
apparent as they later became. Early cars were used only in the city,
where the limited range they could travel between recharges was not a
significant problem, since the distances to be crossed were small. The
most successful producer of electric cars, Colonel Albert Popes Colombia
Motor Company, delivered a vehicle that could go fifty miles between
recharges and had a speed of 35 mph. The low top speed was no great
limitation when no production model auto powered by gasoline or steam could
do any better.
The electric motor was silent, vilbrationless, safe, odorless, and started
instantly: no other automobile power source could say the same.
Electricity also had the advantage of being very popular with the public,
as the electric light was an invention of recent times, and new uses were
being found for electric power every year. But even Thomas A Edison
himself said, "The future of the automobile will be the the gasoline
engine. The inventor of the electric light was well aware of electricities
limitations. The electric car prospered until the later years of the first
decade of the twentieth century and then, in response to improvements in
roads that made longer distance driving feasible, and the advance of the
gasoline car, it quietly faded away.
The steamers limitations were less obvious, and might have been overcome
eventually had not the gasoline engine gotten there first. Steam engines
used kerosene to heat water for steam pressure, and kerosene was more
expensive than gasoline at the time. Early steamers required a long wait
before the engines built up enough steam pressure to move the car - on a
cold day it could take up to forty five minutes to get one going. This
problem was later solved by the invention of the flash boiler, but by the
time it became standard the gasoline powered car had developed an
insurmountable lead. The steam engine was also inherently less efficient
than the gasoline engine - although since it was an external combustion
device, it burned more cleanly than its counterpart and produced less in
the way of harmful exhaust gases. Consumers did not recognize this benefit
as the asset it was, unfortunately, for air quality would not become a
concern for several decades yet.
The steamer lasted about as long as the electric car, although a high
quality streamer, the Doble, was being produced as late as 1924. About 100
different makes of steamer existed during its heyday, and 80% of them were
built in the New England states. Even by 1910, however, it was clear that
the future belonged to the gasoline engine
The First Popular Car
In 1897, Ransom E Olds set up a car company called the Olds Motor Works in
Lansing, Michigan. His new cars would be gasoline powered, Olds having
given up on steam engines. In 1899 he moved the company to nearby Detroit,
since he considered Lansing too small to support his business while Detroit
was already a large city and growing fast. Although he later moved back to
Lansing, Olds remains the first automaker to set up shop in what was to
become the automobile capital of the world. A disastrous fire at the Olds
auto plant in 1901 nearly wiped out the fledgling automaker, but the event
was something of a blessing in disguise. Of the several prototypes in the
factory, only one was saved, forcing Olds to concentrate his production and
advertising efforts on that one car. The automobile, the Curved Dash Olds,
made its debut later that year and was a smashing success. It sold for
$600, advertised as "a dollar a pound" as compared to the Locomobile which
cost around $1000. The Curved Dash Olds was the first quantity built car
in America with over 16,000 being made between 1901 and 1907. In 1905 it
became the subject of a popular song still sung by barbershop quartets
today, "In My Merrie Oldsmobile". The car and the company both became
known by the name "Oldsmobile" although it was never the official name of
the car and did not become the name of the company until much later.
Oldsmobile overtook Locomobile as America`s leading car manufacturer in
1903. Three years after that, though, the company`s sales dropped
dramatically when it stopped making the Curved Dash Olds and turned to
making more expensive cars. Ransom Olds objected to the change in
direction, realizing, as Henry Ford did, that the biggest market lay in the
car for the average man. But by that time he had left the company and had
no say over it. He would later start up another car company, Reo, back in
his hometown of Lansing.
The Century Turns in America
By 1900 the automobile was well established in Europe, at least among the
upper classes. It still had a way to go in the United States, though he
first automobile show in America was held in New York city in this year,
and the press called it a triumph "almost equal" to that of the yearly
horse show.
Electrics and Locomobiles were making the rounds of most major cities on a
regular basis. Yet, on the farms that made up most of the country, almost
no one had even seen an automobile. When they did see one, they generally
hated it on sight or if not on sight, shortly thereafter, the first time it
spooked their horses or killed one of their farm animals. Farmers often
went out of their way to sabotage early motorists, spreading tacks and
broken glass on the roads (sure to cause at least one puncture of those
fragile early pneumatic tires)" or running rope or even barbed wire across
them. Automobiles and their drivers were sometimes stoned, by adults as
well as mischievous children, or even attacked with horsewhips.
To be fair, much of the farmers, anger at the automobile was legitimate,
and fueled by the cavalier attitude taken by the early motorist toward the
farmer and his property. Drivers killed farm dogs and chickens with their
cars and kept right on driving, and they sometimes deliberately attempted
to spook horses pulling carriages and carts (an easy thing to do, and most
amusing - except for the people in the buggy or wagon). The vast majority
of early drivers were rich city people and their disdain for their rustic
countrymen did not lead them to polite behaviour while in their cars or out
of them.
In a distinctly unusual attempt to pacify horses and horse owners alike,
one imaginative entrepreneur, Uriah Smith of Battle Creek, Michigan,
proposed to build a type of car called the "Horsy Horseless Carriage." This
vehicle sported a life-sized horse`s head and neck on the front of the car,
designed to fool credulous equines into thinking that the automobile was a
standard buggy. As an additional plus, the head could be made hollow and
put into service as a fuel tank. Unfortunately the head did nothing to
disguise the smell or the sound of the automobile, and its doubtful that
Smith succeeded in tricking even a single horse with his invention. He and
his car rapidly vanished from the motoring scene.
In the city, on the other hand, the car was accepted quickly because the
horse had made itself less than welcome through the accumulation of massive
piles of dung that had to be carted away (and often weren`t), leading to
serious sanitation and disease problems. One often overlooked benefit of
the automobile to cities was the elimination of this threat, and the
concurrent sharp reduction in the occurrence of diseases such as tetanus
(lockjaw), which thrived in the horses by-products. An additional health
hazard resulted when the horses, often starved, ill treated, or simply
worked to death, dropped dead in the streets. Owners often abandoned the
carcasses, leaving them to rot in public for days at a time. This caused
serious disease potential as well as an unbelievable stench. Even the
sharp odor of car fumes could not begin to compare.
Early commercial production in the United States did not really get
underway until around 1900, but after that point it increased dramatically.
At first, American cars compared poorly to European vehicles for quality,
but as more companies entered the field and the competition for sales grew
more fierce, U.S. carmakers rapidly upgraded their wares until they
approached a European level of reliability. The first commercial American
cars were "assembled", built from parts produced by many different
companies, while in Europe most carmakers produced the majority of their
own parts in their own companies, resulting in better workmanship in the
completed car. Once American carmakers started to amass the knowledge and
capital to be able to the same, the European lead in quality narrowed
Propelled by the sales of such popular vehicles as the Locomobile, the
Columbia electric car, the Curved Dash Olds and the Stanley and White
Steamer, and aided by literally hundreds of small carmakers, U.S.
automobile production hit 33,200 passenger vehicles in 1906, enough to
unseat France from its position as leading car manufacturer. The American
lead was no flash in the pan, either, but grew larger with every year that
passed. It would take over seventy years and a drastic change in the
motoring scene for any other country's carmakers to equal the American car
industries power.

Evidence that the International motoring community was taking American cars
seriously arrived in 1908 with the New York to Paris automobile race.
Jointly sponsored by the New York City Times and Paris Le Matin newspapers,
the course covered a total of 13,341 miles. Six cars left New York on
February 12 and crossed the continent to San Francisco. From there, they
were shipped to Alaska and thence to Japan and the Russian port of
Vladivostok. The last leg of the race was on land from Vladivostok to
Paris. The winner was George Schuster driving a Thomas Flyer, who covered
the distance in 169 days. All the contestants agreed that the roads of
Eastern Europe, and even Siberia, were less of a problem than those of
upstate New York.
In the year 1903, a man named Horatio Nelson Jackson first crossed the
American continent in a car. In the same year, an automobile succeeded io
crossing the social rift between the city and farming country. The "high
wheeler" car, basically a motor-powered horse buggy" had wheels tall enough
to cope with badly rutted country roads and deep mud pits. Several makes
of highwheeler achieved limited success, and gave farmers the first taste
of what an automobile could do for them.
Sears Roebuck offered one make of high wheeler through its catalog from
1908 to 1912, and a pleased farmer wrote in, "Iy beats a horse bad as it
don`t eat when I ain`t working it, and it stands without hitching, and best
of all it don`t get scared at automobiles". The tall cars lasted about six
years, but fell victim to rising expectations. Their top speed was around
25 mph, they offered little preotection from the weather, and they faced
stiff competition from a new arrival on the car market that was the first
true automobile to deal fairly well with country roads: the Model T Ford.
Why Detroit?
Why, precisely, did the city of Detroit become the one and only true home
of the American automobile? Part of the reason had to do with simple luck
in having several of the most prominent figures in the history of the
automobile industry living nearby, but there were more logical reasons as
Although one of the earliest working automobiles, that of Charles Brady
King, ran on the streets of Detroit, it must be remembered that prototype
cars were chugging along on the streets of many a Midwestern and New
England city at that time. Detroit was nothing special in that regard.
More influential was the establishment of the Olds Motor Works in 1899 for,
as the city where the first truly popular car was manufactured, Detroit
naturally became associated with automobiles in the public mind.
Still, as of 1899 several other carmakers had begun successful car
companies in other locations Why didn`t their cities become "Motortown"?
The reason was that they were making the wrong types of cars. The New
England carmakers were producing steamers and electrics for the big Eastern
cities, and did well with them for a while. But when the popularity of the
steamer and the electric declined, so did the image of New England as the
carmaker`s home.
The Midwest was, by comparison, a rough and ready place, requiring
something less dainty than an electric and hardier than a finicky steamer.
Settlements were further apart than in the developed East, calling for a
vehicle that could promise an extended range. The Midwest needed the
gasoline automobile, and Detroit was one of only two places that were
making them in quantity. Detroit`s only challenger was Cleveland, Ohio,
home of the Winton.
Both Cleveland and Detroit had several advantages in common. Both were,
vigorous cities located on what was still essentially a frontier, altlhough
settlers were rapidly taming it. Their location midway between the settled
East and the boisterous West made them a natural way station for
adventurous people, some of who decided to make their homes in the Mdwest
rather than continue on. Both cities had abundant access to water and rail
transportation, and a large amount of skilled labor for the workshops, much
of which came from the influx of Irish German, and Dutch inmmigrants that
streamed into the United States between 1880 and 1920. Both Cleveland and
Detroit had fostered one very successful gasoline-powered automobile
company. Thus proving their suitability as a home for the industry.
However, there were three things - or, rather, three people - that Detroit
had which Cleveland lacked. These three men, and the two companies they
founded, cemented Detroits position as the Car City. First was Henry Ford,
with his Ford Motor Company; second there was David Dunbar Buick, who
formed the Buick Motor Company; and third, there was William C. Durant,
who built upon the keystone of Buick to create General Motors
Third Times the Charm for Ford...
Henry Ford was born July 30, 1863, on his family`s farm in Dearborn,
Michigan. Young Henry was not cut out for farm work, as he disliked the
rural life and had a natural mechanical aptitude At age 15 he ran of to
Detroit to train as a machinist, and later advanced to the position of
chief engineer of the Edison Illuminating Company. By the time he followed
Charles King`s automobile through the streets of the city on a bicycle, he
had for the past six years been tinkering with the idea of building one of
his own. Three months after Kings jaunt, he succeeded. His Quadricycle
was the sixth American built gasoline car to run.
Ford tries to found a company to build his cars for the first time in 1899,
but the Detroit Automobile Company folded just over a year later. In what
was a familiar pattern, Ford and his business partners could not manage to
agree on what the aim of the company should be. The backers wanted to
build cars to sell, while Ford was not yet satisfied with his designs and
wished to keep tinkering. Ford, always stiff-necked and headstrong,
refused to compromise and his backers pulled out.
Undaunted, Ford tried again later that year, forming the Henry Ford Company
with William Murphy as a partner. Once again, the company went under,
brought low by personality differences between Ford and the man with the
money. Ford wanted to build race cars, feeling that his designs werent
ready for wholesale production yet. Murphy disagreed, and brought in Harry
Leland as a production consultant. Ford, furious, walked out, taking his
name with him. Leland and Murphy put to use the parts and equipment Ford
had bought to build an improved Oldsmobile engine of Leland`s design.
Since Detroit was celebrating the two-hundredth anniversary of its founding
by Frenchman Antoine de la Mothe Cadillac, Leland named his new car the
Exasperated by having to deal with men who thought they had a right to tell
him what he should do with their money, Henry Ford gave up on business
briefly. He turned instead to racing as a means to obtain money and
publicity, and to improve his engine designs. He did quite well at it
setting a number of records. The famous racer Barney Oldfield joined the
Ford team in 1902, and in the following year became the first nman to
travel a mile a minute, driving Ford`s most famous racer, the "999". In
1904, shortly before Ford gave up on racing entirely, he took the flying
mile record in the same car, traveling 91.37 mph.
Buoyed by his racing successes and his new popularity with the public, in
1903 Ford took another stab at starting a business. His partner this time
was Alexander Malcomson, a coal dealer. The name was originally to be the
Ford & Malcomson Company, but shortly after its founding it was changed to
the Ford Motor Company. The reason for the change is not recorded, but it
was most likely done to pacify the temperamental Henry Ford. The new
company began with $100,000 capital funds, $28,000 of that in cash.
Malcomson, a canny businessman, assigned his talented and trusted
bookkeeper, James Couzens, to the Ford Company to keep an eye on Malcomsons
money. Couzens, ability to do so, and to get along with Henry Ford, was
largely responsible for the survival and eventual success of the fledgling
automobile maker. In later years, James Couzens would turn his
administrative talents to use for the public good, serving with distinction
in the U.S. Senate.
The Ford Motor Company baptized its first car the "Model A" a name that it
would later reuse for an entirely different car. A true "horseless
carriage" the Model A strongly resembled a horse buggy with a steering
wheel and no horse. The first one was sold a month after the companys
founding, to a dentist in Chicago. By 1904, the Ford Motor Company had
produced 1,708 automobiles, a remarkable number for a new carmaker in its
first year. Two additional models, the Model B and the very expensive
Model C priced at $2000, had joined the Model A.
Alexander Malcomson wanted the company to build more expensive cars,
believing in the prevailing wisdom that the market for automobiles lay with
the rich, whose tastes should be catered to if one wanted to make a profit.
Ford disagreed, believing instead that a larger market lay with the average
man, if only a car could be made cheaply enough for him to afford it. In
this case Ford`s instincts were correct, and fortunately for the Ford Motor
Company, his wishes prevailed. Henry stated his idea of production thus:
"The way to make automobiles is to make one automobile like another
automobile - to make them all alike "He would later turn this philosophy
into a novel and wildly successful manufacturing method called the assembly
...And also for Buick
In the year that Henry Ford was taking his second shot at becoming a
carmaker, a Scottish born engineer named David Dunbar Buick was taking his
first. Buick had already made a major contribution to modern life by
inventing a process to apply enamel to cast iron bathroom fixtures thus
making them easy to clean and sanitize and making the indoor bathroom a
possibility. Like many brilliant inventors, however, he bored easily, and
by the turn of the century he had abandoned plumbing and instead seized on
the motorcar as an interesting device with which to experiment. His first
automobile business endeavor went by the rather ponderous name of the Buick
Auto Vim and Power Company of Detroit.
Buick, although a much more pleasant personality than Henry Ford, was if
anything a poorer businessman, and his first effort rapidly went broke. He
tried again a year later, founding the Buick Manufacturing Company with the
engineer Walter Marr, and this time he actually managed to get some cars on
the road before the company foundered. In 1903 one month before the Ford
Motor Company came into being, Buick`s business was reorganized as the
Buick Motor Company. It, too, seemed destined to fail within a few years -
until fate, in the person of William C. Durant, stepped in.
Billy Durant was one of the partners of the successful Dort & Durant
Carriage Company in Flint, Michigan when in 1904, he saw a Buick automobile
passing by on the street and became intrigued by it. Expansive, charming,
and personable. Durant was a salesman and businessman, not an engineer or
inventor. Unlike Buick and Ford, he enjoyed playing the money game perhaps
a bit too much. Durant bought a controlling interest in the faltering
Buick Motor Company, and set about making the business profitable.
Durant reorganized Buick Motors in the same way he had run his carriage
business. His first move was to go out and buy up all the companies that
provided components for the Buick cars to ensure a cheap and continuous
supply of parts for the automobiles. During a brief but intense financial
panic in 1907 (deliberately caused by financier, Pierpont Morgan as a
cynical demonstration of his power). Durant kept the Buick factories
running at full speed while all other manufacturers slowed down in response
to the crisis. When the panic ended suddenly, Buick was the only carmaker
with cars on hand to sell: and its future was assured. It was during
these years that Durant first began to envision building a "holding
company" a corporation uniting all automakers and their suppliers in one
organization. In the next year, his dream would start to take shape.
If any single year can be said to have determined the shape of the American
Automobile industry, it would be 1908. This year saw the premier of the
Model T Ford, the car that would put a nation on wheels, and the formation
of the company that would one day be the world`s largest, General Motors.
It was in this year that William Durant hired a French race car driver
named Louis Chevrolet to race Buicks for him. And, as fate would have it,
it was also the year that a man named Walter Chrysler bought his first
automobile (a Locomobile steamer) and took it apart in his garage to see
what made it work
The Model T
The Ford Motor Company produced two new car designs in 1905, the Model K
and the Model N. The Modrel K was an experimental six cylinder car that
did not stay in production long. Priced at $2,800, it was anything but the
"average man`s car". that Ford envisioned - in fact, it was more expensive
than the highest priced Cadillac of the same period. Ford was also less
than happy with the six cylinder engine, which had problems with persistent
vibrations that he could never eliminate, and in his disgust with the
engine refused to allow his company to manufacture any more six cylinders
for over thirty years. The Model K was marketed as a cutting edge vehicle
and advertisements warned buyers, "Don`t Be a Year Behind-er." This was one
of the first times the idea of a "yearly model" appeared in America.
Ironically enough, in later years Henry Ford was to scorn the idea of
turning out a new model every year to catch the fancy of the fickle public.
The Model N car was more successful. A four cylinder vehicle selling for
less than $500, it was a direct precursor to the Model T, and it sold well
enough to move Ford from fourth place to first by 1906. At about the same
time, Ford decided that buying all Ford automobile parts from other
companies was an unreasonable expense, and formed the Ford Manufacturing
Company in order to be able to build his own components. He deliberately
set up the company without including Alex Malcomson, as he felt (perhaps
rightly) that Malcomson`s ideas would eventually lead to the ruin of the
company if unchecked.
Malcomson, furious at Ford`s underhanded maneuvering, left to start his own
business making automobiles, the Aerocar Company. He kept his Ford stock,
however. Henry Ford felt that it was unjust for Malcomson to use profits
made from Ford`s cars to manufacture a competing make and took Malcomson to
court over it. The judge agreed with Ford, and forced Malcomson to divest
himself of his Ford stock. Despite the breach between Ford and Malcomson,
James Couzens and another Malcomson employee, a brilliant young engineer
named Childe Harold Wills, decided to stay with Henry Ford.
Ford brought out the Model R and S cars in 1907, which kept his company as
the top manufacturer. His nearest competitor was Buick, which was
producing about two thirds the number of cars Ford was. In the fall of
1908, Ford introduced the car that was to make his name a household word,
the Model T. It was popular right from the start, but it would not become
omnipresent on American roadways until five years after its introduction.
Few other cars generated the level of affection - and exasperation in their
owners as did the "Flivver" also known as the "Tin Lizzie"
The Model T was designed by Ford, Wills, and Joseph Galamb. In 1906, Wills
had discovered a process for machining vanadium steel into automobile
components. Vanadium steel components required less metal, and so were
lighter but at the same time stronger than contemporary parts. The
strength of vanadium steel was in a great part responsible for one of the
Model Ts greatest selling points, its durability. Its sole other virtue
was its economy of operation. It did not possess the advantages of either
beauty or style, but it was not hampered much by its lack of looks. The
people for whom it was intended and who bought it were looking for
dependable, affordable transportation, not a status symbol, and that was
precisely what Ford gave them.
The car was a simple design, borrowing elements from the Model R and S and
adding a few innovations of its own, including the vanadium steel
crankshaft and an engine designed to be easily serviceable. It had a four
cylinder, 20 horsepower gasoline engine and a simple planetary transmission
operated by pedals on the floor. It also had a steering wheel set on the
left to make driving on the right easier. Although driving on the right
had been the American standard for some time, carmakers had not yet gotten
around to standardizing the position of the steering wheel and in numerous
models of the time it was still placed on the right. The popularity of the
Model T with its left set wheel, helped determine what the standard would
become in the years that followed.
The Model T was offered in five body styles, at prices ranging from $825 to
$ 1,000 at its introduction. The price dropped rapidly as Ford found ways
to economize on production. The transmission and steering were very cheap
(which is why the car could be made inexpensively) and somewhat outmoded
even in the year he car was introduced. Nevertheless, the same
transmission and steering remained on the car until it ended production
after nearly twenty years. All components were Ford made except for the
tires, made by Harvey Firestone, and the bodies, provided by a variety of
Production began fairly slowly, but by the summer of 1909 the Ford Motor
Company was building cars at the rate of one hundred a day. Back in 1906,
Henry Ford had predicted that he would one day reach that figure, and been
universally mocked for his statement. He must have felt enormous
satisfaction on the day he first proved the mockers wrong. In its first
year on the market nearly six thousand Model Ts were sold.
The Founding of General Motors
Billy Durant was a man with large dreams. Once he had Buick Motors up and
running, he wasted little time in pursuing bigger fish. His grand plan was
to unite as many car companies and their suppliers as possible under one
name. This would guarantee financial security for all of them in a bad
year, and enable the resulting conglomerate to be able to offer a wide
range of automobiles priced to suit any pocketbook. In 1908 he set out to
convince America`s other carmakers to join him in his new venture, a
company called General Motors. He first approached Ford with his idea, but
Ford, realizing that the company would be Durant`s and not his, was not at
all willing to relinquish control of Ford and refused.
Most other carmakers Durant approached at first felt similarly, distrusting
the smoothtalking Durant, and therefore declined his inivitation. As a
result, GM was formed in deep secrecy on September 16, 1908, with only
$2,000 in capital funds. With that small base to work from, Durant bought
his considerable talents as a salesman to bear and within two weeks had
parlayed his tiny starting sum into $12.5 million. His first move was to
"buy" Buick Motors. A month later, he added Oldsmobile to his group -
Olds, company had been faultering since the departure of its founder in
1904 and the ensuing mishandling of the company by its primary
stockholders, the Smith family. In the following year, Durant added
Oakland (which would become Pontiac) and Harry Leland`s Cadillac cars to
his line. By the end of 1910, he had bought seventeen car companies and a
large number of component makers as well, and set the foundations for a
commercial empire.
One sad casualty of Durant`s empire building was David Buick. Buick was
never very interested in the business end of his company, preferring
tinkering with his engines to engaging in the wheeling-dealing financial
enterprises of which Durant was so fond. After Buick and Durant quarreled
over the question of whether Buick was going to sell his engines to other
firms - Buick said yes, Durant said no. David Buick bowed out of the
company he had founded leaving it in Durant`s hands. Durant saw to it that
Buick left with a handsome parting gift of $100,000 of Durant`s own money
and a large chunk of Buick stock, but unfortunatly it did David Buick
little good. He invested unwisely in a number of shaky businesses and lost
everything, ending his life in poverty and obscurity as cars bearing his
name rolled by in the streets outside.
Durant meanwhile proved to be over eager in the pursuit of his dream. He
spent a great deal of money in a very short time (his purchase of Cadillac
for $5.75 million was the largest single financial transaction ever at the
time it was made), and much of it went for companys of dubious quality.
Durant bought many businesses on the off chance that the patents they held
might come in useful someday, and most of them didn`t. Only two years
after its founding it appeared that General Motors was about to go under
before it had really gotten off the ground.
Durant and the other heads of GM appealed to a banker`s consortium to bail
out the company. The bankers agreed to do so, but as a condition they
required that Billy Durant step down as president of Buick and vice
president of GM. Durant bowed to the inevitable and resigned his posts,
although he kept his seat on the Board of Directors of General Motors. His
place at Buick was taken by Charles Nash, who would go on in future years
to found a car company of his own. But General Motors had not heard the
last from Billy Durant.
The Selden Patent
Back in 1895, a lawyer named George Selden had obtained a patent for a
primitive automobile. Four years later he sold the patent to a group of
electric carmakers, the Association of Licensed Automobile Manufacturers
(ALAM), headed by Colonel Pope of Colombia Electric. The electric
automobile manufacturers had little use for the patent, which was for a
gasoline engine, but they may have been hoping to discourage the
development of gasoline cars until they could work out the problems with
the electric, or perhaps they were just hedging their bets, as no one then
could tell which type of car would eventually dominate the market.
Most gasoline engine automobile makers of the period paid royalties to ALAM
thanks to the Selden patent, or got around it by joining ALAM itself.
Winton, Knox, Locomobile, Oldsmobile, Packard, amnd the Pierce Arrow had
all become members rather than pay royalties. As of 1903, Selden had not
built a single car in that year, to defend his patent from a challenge, he
built two of them, but neither of them ran more than a few yards. The
judge did not consider the failure of the vehicles to be an issue, though,
and upheld the patent. The verdict caused a stampede as thirty more
automakers rushed to join up with ALAM.
In the same year, Henry Ford made inquiries about obtaining membership, but
was brushed off by F.L.Smith of Oldsmobile because he was "only an
assembler." Ford, his combative nature aroused by the insult wore that ALAM
could take its patent and go to Hell, for they would never get a cent of
royalties out of him.
During the first year of full scale Model T production, in 1909, ALAM
brought suit against Henry Ford to force him to pay up. Ford challenged
the patent on the grounds that Selden`s car ran on a two cycle engine while
his ran on a four. He also founded his own group, the Motor Car
Manufacturers Association, as support for the fight. Ford`s organization
included himself Marmon, Reo, Maxwell-Briscoe, Mitchell, and the truck
manufacturer Mack. After two years of court battles Ford won the case on
The effect of his struggle with ALAM and his victory over them on the
public was enormous. Ford came to be viewed as the representative of the
Common Man contending with the over whelming forces of Big Business and
succeeding against high odds. This view was not entirely justified; the
Ford Motor Company was already well established as a Big Business in its
own right, and in fact Ford had more money than any of the car
manufacturers that comprised ALAM. Nevertheless, the court case made Ford
a folk hero of sorts, and he came to be viewed as the champion of the
underdog Midwest against the establishments of the East. In any case,
there is no question that all the furor helped his car sales tremendously.
Durant Finds a New Partner
In 1911, Billy Durant found himself in the frustrating position of being on
the Board of Directors of GM, but being essentially powerless. This did
not sit well with him at all, and he set out, in his own inimitable style,
to do something about it.
Durant realized, as Olds and Ford had before him, that a tremendous market
existed for a cheap car of reasonable quality. He also realized that
General Motors had no plans to build any car fitting that description.
Never one to miss an opportunity (good or bad), Durant approached Louis
Chevrolet, a well known race driver who had worked for Durant at Buick.
Durant resoned that a race car driver must have some idea what makes a good
car, and when he proposed to Chevrolet that Chevrolet should design the
kind of car Durant had in mind and Durant would provide the financing,
Chevrolet was agreeable.
At the end of the year, the company was formed. Chevrolet designed the
car, and Durant set up the company and did the marketing. Nothing but the
design and the name were Chevrolets. The company belonged to Durant, and
Chevrolet was not even on the board of directors. The earliest cars
Chevrolet designed were less than successful, but in 1914 he produced the H
series 490. It became a significant success, and the new company`s
fortunes began to rise. Durant, with a sucessful company to work with,
began to scheme to achieve greater things once again, but the Directors of
General Motors failed to catch the scent of trouble on the wind.
Woodrow Wilson while still president of Princeton, condemned the automobile
as a spreader of social envey amoungst the lower classes, since it was a
luxury only the idle rich could afford. Little did he know that within a
very few years, the automobile would become available to nearly everyone.
The man who made that possible was Henry Ford, and he did it by inventing a
manufacturing process that would revolutionize the automobile industry and
many other industries as well. Up until 1906, the U.S. lagged behind
Europe in auto development, but by 1915 that situation had completely
turned around, thanks almost solely to Ford.
Henry Ford had a dream: he wanted to build an automobile that the common
man could afford. With current production methods, however, it was
impossible to produce a car cheaply enough so that it could be sold to
someone of modest means and still make a profit for the manufacturer. The
cost for parts, and more importantly for labor, were just too high. The
only way to get around these problems was to create a new method of
Flivvers for Everyone
The concepts that led to the inspiration of the assembly line had been
around for a while before Henry Ford put them to work. In Delaware in
1784, Oliver Evans set up a system of conveyor belts and chutes that
allowed him to grind flour in a continuous process, and keep his mill
running day and night. The basic technique was adopted by the rest of the
milling community, and came to be used in the textile, iron, canning,
hardware, and meat-packing industries. It may have been the last that
inspired Ford; one story holds that inspiration struck when he saw
carcasses being moved through a meat packing plant on a chain conveyor
belt, each worker taking off the appropriate cut as it passed his station.
Automobiles were not carcasses, though - they had to be put together, not
taken apart. In order to make Fords idea really work, another element was
required; interchangeable, standardized parts. The first standardized
parts were made in 1800 by Eli Whitney, inventor of the cotton gin, who
devised a system for precision machining of parts in order to make large
numbers of rifles for the U.S. Militia. It was Ford`s particular genius
to see that the two ideas - a belt that carried parts past workers instead
of the workers carting parts to a central location, and standardized parts
that eliminated the need for individual hand fitting and adjustment of
assembled components - could be combined to produce complex manufactured
goods in an efficient manner.
Ford first instituted his new process in the manufacture of magnetos for
ignition systems. The trial was a huge success. What used to take one man
eighteen minutes to accomplish could be done in only five - less than
one-third the time. Encouraged, Ford soon expanded the system to the
manufacture of entire automobiles. It worked as well there as it had for
the magnetos, reducing the time needed to assemble a chassis from twelve
and a half hours to only one and a half. One disadvantage to the new
technique was that only black paint would dry fast enough to make the
faster assembly practical, so from 1914 on a customer could have his Model
T In any color, as long as it`s black.
The main effect of the assembly line, from Ford`s point of view, was that
he could now afford to make the "car for the average man" that he`d dreamed
of since his company was founded. He put his new assemblers to work
producing Model T Fords in numbers previously undreamed of. In 1914, Ford
alone produced 202,667 cars, more than the rest of the worlds manufacturers
combined, and by 1923 the manufacturing rate was such that 1,817,891 Fords
were built in a single year, more than four times the number of Ford`s
closest rival at the time, Chevrolet.
The price of the Model T Ford plummeted in response to the new economical
manufaturing method. By 1916 it was down to $360, and by 1924 one could be
had for $260. With prices like that, the customers didn`t care that the
Flivver was fairly ugly and not exactly the most modern car on the road.
They bought in droves. By 1920 two thirds of all vehicles on the American
road and one half of those in the world were Fords. For the next fifteen
years, Henry Ford was the undisputed automobile king. Ford, born of farm
stock, was particularly pleased when Model T became the first true
automobile to be a hit with farmers, replacing the vanishing high wheeler
in their hearts. Like the high-wheeler and unlike its contemporaries, it
was not bothered by the rough back-country roads. IT was a plain and
simple car for a plain and simple people.
Henry Ford Objects to Dodge
For many years Ford had been having its engines and a few other parts made
by the Dodge brothers in their family`s machine shop. They had begun
building engines for Olds in 1901, but in 1903 Ford offered them $5,000 a
month and 50 shares of Ford stock each to work for him instead. The stock
alone was more than enough to make them millionaires when the Model T took
By 1910 the Dodge brothers, who had some good ideas for automobile
innovations, were growing frustrated with Henry Ford`s single minded
concentration on his Model T and his refusal to make any improvements on
the car. Without telling Ford, they began to design a car of their own,
planning for it to be of better quality than the Model T but priced in the
same moderate range, and in 1914 they incorporated the Dodge Brothers
Company. Their premier car, the Dodge Four came out the following year
with the first all steel body, as well as many other lesser innovations,
and a price tag of $785.
Though derided by some as a "tin can" the car, supported by the Dodge
Brothers, sterling reputation as engine makers, was an instant success.
Some 22,OOO firms applied for Dodge dealerships before the car was even
officially launched. In its first year, the firm went from non existence
to third place behind Ford and Willys Overland.
Henry Ford found the Dodge Brothers, instant success a difficult pill to
swallow. He felt that the Dodge engine had risen to fame on the back of
the Model T, not the other way around, and for the Dodge Brothers now go
into business using that reputation to make a competing car was base
treachery. To add insult to injury, they owned 10% of his company and
supported their business with profits from his cars! The Auto King vowed
to rectify the situation. In 1916 he announced that instead of paying
dividends to his stockholders, he planned to plow the companys entire
profits into expansion and development of the Ford facilities. The
stockholders naturally objected, and when Ford refused to yield, they filed
suit to force him to pay. Three years later a judge decided in favor of
the stockholders, much to Ford`s annoyance.
These events convinced Henry Ford that letting other people have any say
whatsoever in the doings of his company was insupportable. Therefore, he
set about immediately buying up all the shares of Ford that he did not
personally own. The stock, which had sold at $100 a share when first
offered cost Ford $12,500 a share to buy back. The total cost of the
purchase was an astounding $100 million, but Henry could afford it. It was
almost forty years before anyone other than a member of the Ford family
would hold even a single share of Ford stock again. Today, the family
still holds 40% of all shares
The Prodigal Returns
Billy Durant and Louis Chevrolet were having trouble agreeing on company
policy for Chevrolet, or even what type of cars they were going to build.
Chevrolet wanted to build big, expensive cars but Durant controlled the
business and directed him toward lighter, cheaper automobiles instead.
Their differences of opinion reached a critical level in 1913 when Durant
suggested to Chevrolet that he adopt a more polished image appropriate to
his new status as a successful manufacturer - for example, Billy said,
Chevrolet should abandon his beloved lower class cigarettes for the more
prestigious cigar. Chevrolet, pushed too far, blew up and walked out,
leaving Durant sole control of Chevrolet.
Chevrolet continued to prosper under Durant`s adept management, garnering a
nice slice of the economy car market. In 1915 Durant decided it was time
to implement the strategy he`d been working on all along: the takeover of
his beloved GM, stolen from him five years before. Durant used his profits
from Chevrolet and bank loans against the company to buy up some GM stock.
Then, by arranging a stock swap between Chevrolet and GM shares favorable
to the GM stockholders, he expanded his total past the critical 50%. At
the next meeting of the Board of Directors of GM Durant sauntered in and
announced that he was back in charge.
His Time of triumph was destined to last only a few years, however. It was
Billy Durants personal tragedy that, for all his skill at running a single
company, he did not seem able to get the hang of how to successfully manage
a large, diversified corporation. Failing to learn from his earlier
experiences, Durant returned to his old policy of spend, spend, spend.
This time he went for a so called "vertical" expansion, buying up parts
suppliers such as Fisher Body, Frigidaire, and Hyatt Roller Bearing. With
Hyatt Roller Bearing came a talented young manager named Alfred P. Sloan
who would one day become Durant`s successor. But it would take some time
for the effects of Durant`s spending binges to become apparent, so for the
moment, Billy Durant was riding high.
In 1917 with World War I raging in Europe and America`s involvement
becoming more and more likely with each passing day, Harry Leland of
Cadillac, a staunch patriot, asked Durant if he could use Cadillac
facilities to manufacture Liberty airplane engines. Durant, a pacifist,
refused. To his surprise, Leland`s determination to add to the war effort
was so strong that the founder of Cadillac resigned in order to start a new
company devoted to building the Liberty. When the war ended two years
later, Leland`s new company, Lincoln, went over to doing what Leland did
best, and within a short time Lincoln cars were competing with Lelands old
company, Cadillac.
It was during the Roaring Twenties that America`s "love affair with the
automobile" became passionate. Between the years of 1920 and 1929 annual
car production in the U.S. jumped from two million to four million, and
total car registrations went from eight million to twenty three million.
By 1930 there was one car for every 13 households. Twenty years before,
the figure had been one per forty four. Owning a car became a symbol that
the buyer could afford "the good life" and everyone wanted one.
All other purchases were set aside in favor of the automobile - sometimes
even basic necessities. We`d rather do without clothes than give up the
car, said one mother of nine in 1923, while a 1925 survey in Muncie,
Indiana showed that twenty-one out of twenty six car owning households had
no bathtubs with running water. When asked why they chose a car over a
bathtub one farmers wife replied simply, "You can`t ride to town in a
Many improvements were made in the automobile during this period. Among
the features that became commonplace were balloon tires, enclosed hydraulic
brakes, standardized gearshift, noclash shifting, windshield wipers,
taillights, hydraulic shock absorbers, and the mechanical fuel pump.
Automobile designs started to conform to a few standard looks, and much
variety disappeared as carmakers grew unwilling to seem "unconventional".
After 1929 obvious ostentation went out of vougue with a desire not to
flaunt wealth, if you were fortunate enough to still have it.
One clear trend that developed through the 1920s was the ascendance of the
businessman over the inventor in the American auto industry. Early
automobile producers were in general engineers and machinists not
salespeople or administrators. They brought their ingenrity and technical
know how to their companies, while other men brought the money and the
business savvy The few inventors who managed to start their own companies
without the help of a businessman such as the Stanleys and David Buick, did
so by selling off their previous assets for capital. But eventually they
were forced to turn to others to handle the problems of managing the new
By the mid 1920s nearly all of the original auto pioneers were no longer
associated with their companies, the notable exception being iron willed
Henry Ford. Ransom Olds had been forced to leave his company in 1904 when
the Smith family, his backers, refused to let him build the kind of car he
wanted, David Buick had abandoned his to Billy Durant, as did Louis
Chevrolet, and the Dodge Brothers had passed away.
The End of Billy Durant
The American economy nose dived in 1920, slumping into a temporary
depression. It was a foreshadowing of events to come, and it spelled
trouble for Billy Durant`s overextended General Motor Corporation. Durant
took heavy losses in the stock market, in both his personal fortunes and
those of GM. Many of Durant`s friends who had purchased stocks on his
advice experienced severe financial difficulty, and Durant`s sense of
personal honor led him to bail each and every one of them out at disastrous
cost to himself. By the end of the year, his personal debts totaled over
$800,000, and the only asset he held was his GM stock.
The bankers backing GM, long unhappy with Durants free handed money
policies stepped in again as they had in 1910, offering to write off
Durant`s debt in exchange for shares in General Motors. Durant had little
choice but to accept, and he once again lost control of the company that
had been his brainchild. This time his departure was to be permanent for
the bankers, having been fooled once, demanded that Durant relinquish his
seat on the Board of Directors as part of the settlement.
Durant re entered the automotive field almost immediately, founding Durant
Motors in 1921 with a new set of backers. He had not lost his touch, and
Durant Motors did quite well for a number of years. At long last, cars
bearing Billy Durant`s name were rolling through the streets.
Unfortunately, like so many other carmakers, Durant Motors did not have the
wherewithal to survive the Great Depression, and it folded in 1933.
Like David Buick, Durant ended his life in poverty and obscurity, working
in a small restaurant. An unpleasant auto dealer in the area enjoyed
bringing in customers so that he could impress them by ordering a hamburger
from the man who founded General Motors. Durant died a broken man, but the
company he founded thrived. Even today, although its fortunes are no
longer at their height, it remains the largest single company in the entire
From Dirt Roads to Concrete Highways
In addition to opening up the European automobile market, the ending of WWI
brought another benefit to the American automobile industry in the form of
better roads. Until the advent of the automobile, macadam roads made of
layers of pressed stones had been the standard. But automobile traffic was
hard on macadam, as the high speed of the automobile loosened the stones
and raised huge clouds of dust. This problem was solved by the addition of
asphalt to the base matrix, resulting in a serviceable (if not terribly
durable) road surface. In 1909, the first concrete road was laid - in
Detroit, naturally. But the road network was slow to spread, especially
outside of the cities.
The coming of the popular car led to a public outcry against the state of
the nations roads. People who had vehicles to travel with now wanted
something decent to drive them on. The governnment responded by passing
the Federal Road Act in 1916 to authorize and provide funding for the
establishment of a nationwide system of interstate highways. The Federal
Highway Act of 1921 expanded on this earlier legislation, and the ingenious
Kahn-Wadsworth Bill killed two birds with one law by offering the
government`s large supply of surplus trucks (left over from the war effort)
at rock bottom prices to states and cities that provided for the building
of new roads and the improvement of the ones that already existed. Under
this impetus, Americas road network rapidly expanded.
The improved roads had an immediate effect on the public. In addition to
allowing city folk to travel to the Great Outdoors and making intercity
business easier to conduct, it had more subtle effects on the car industry
itself. For one thing, the open road made a great testing area for
automobiles and the word quickly spread of which vehicles were durable
enough to cope with the increased wear and which ones weren`t. Numerous
small carmakers went out of business because their automobiles failed to
operate to an acceptable standard on longer drives. Since gas stations had
not been invented yet, gasoline was purchased at the general store and
carried in cans in the back of the car for long trips.
People also started wanting faster and faster cars to enable them to cross
the distance between their starting point and their destination in the
least amount of time, so lower performance cars tended to suffer. One such
car was the venerable Model T; with a top speed of 40-45 mph, which dropped
to 35 mph if the extra weight of a weather resistant top was added, it
steadily lost ground to the swifter more modern vehicles.
And as if that weren`t more than enough to cause difficulties for small
manufacturers, another side effect of the expanding road network was an
increased access to formerly isolated areas by the big car companies.
Several makes which were successful on a local basis folded when Ford and
GM came to town. If you drove a well known type of car on a long trip, you
improved your chances of finding a mechanic in a distant location who knew
how to repair it, and a source for repair parts was likely to be closer.
The carmakers that had reached a certain critical size in the 1920s
flourished, while those that were not large enough to support the required
expansion withered and eventually died.
The "Big Three" Are Complete
The year saw the arrival of the last of what were to become the ruling trio
of the American auto industry - Ford, General Motors, and Chrysler.
Compared to the other two members of the "Big Three" Chrysler was a
relative latecomer. Ford began in 1903 and GM in 1908, but Chrysler was
not officially formed until 1928. It had its foundations much earlier,
The Maxwell-Briscoe company was a venerable organization which had been
around since the early days of the automobile. It was reasonably
successful until one of its founders, Benjamin Briscoe, made a major error
in judgment. Briscoe had been approached by Billy Durant in 1908 and asked
General Motors. Briscoe, deciding that he liked the idea but didn't like
Durant, declined, and in 1910 set up a rival group called the United States
Motor Corporation. It included Maxwell Briscoe, Brush, Columbia, Courier,
and Stoddard Dayton. The USMC experienced financial difficulties very
similar to those GM had in its early years, and by 1912 it was in
bankruptcy. Durant managed to convince a finance group to save General
Motors, although it cost him his control of the company, but Briscoe,
lacking Durant`s connections (and perhaps Durants renowned charm) could not
pull off a similar trick, and United States Motors collapsed and vanished.
The failure of the corporation nearly dragged Maxwell Briscoe down with it,
until the company was bought by a man named Walter Flanders, who united
with Chalmers after WWI to form Maxwell-Chalmers. The company never really
recovered completely, though, and in 1921 the experienced automobile
executive Walter P Chrysler, the former head of Buick who had recently
given his walking papers to Billy Durant, was brought in to reorganize it.
Chrysler had some ideas, which he quickly put Maxwell`s engineers to work
on. The result in 1923 was the Chrysler Six, a car with a six-cylinder
high performance engine that could give a top speed of 75 mph. It was an
instant hit.
In 1926, deciding that he was tired of producing cars with other mens'
names on them, Walter Chrysler renamed the entire company after himself.
Two years later he bought Dodge, which had gone into decline after the
unfortunate and untimely deaths of both Dodge brothers in 1920 Chrysler
continued to make design improvements on his cars and also released a new
line in 1929, which he called Plymouth (after a popular brand of twine used
by farmers, whom Chrysler hoped would purchase the Plymouth car by
association) Now, with three different makes of automobile, all successful,
Chrysler was well on its way to becoming a major force in the auto
A Crackerbox Rainbow
Automobiles of early years were "Touring cars" open models that provided no
protection from the wind or inclement weather. It was not long before the
soft top cars arrived, copied from horse buggies, with snap on windows to
use in case of rain. The extra protection of the hardtop was not available
at all until the late 1910s, and then only to the wealthy. The 1920s saw a
major style change arrive in the form of the first affordable hardtop, or
"crackerbox" so-called because of its boxy shape.
The first enclosed hardtop car priced for the average consumer was the
Essex, produced by the Hudson Motor Company in 1919. It sold for only
about $100 more than the open touring car, and many buyers were more than
happy to pay extra to be safe from the weather. The Essex sparked a swift
rollover in the type of car on the road. As of 1920, only 10% of American
cars were hardtops, while by 1925 the Essex had brought that percentage up
to 50%, and in 1929 the changeover was complete, with 90% of cars being
The other major technological innovation that would drastically change the
look of the American car arrived in the 1920s as well. As Henry Ford had
found out when he began producing his Model Ts on the assenmbly line, the
slowest part of the process was the painting of the cars. The paint had to
be brushed on hy hand, dried, sanded to remove brush marks, painted again
and the whole process repeated three or four times for primer, paint, and
varnish. The cars also had to be stored inside while this went on, to keep
grit and dust from sticking to the drying paint, and that wasted a great
deal of space. Ford dealt with this by sticking with the one color that
dried fast enough to suit him, namely black, while other carmakers,
although they didn`t go as far as Henry did, also found themselves
restricted to using a limited range of colors if they wanted to stay
This all changed in 1920, when a chemist working at DuPont invented a quick
drying lacquer, and soon realized that it could revolutionize the
car-painting process. He took his idea to Charles Kettering, founder of
the Dayton Electronics Laboratory (DELCO) and head of research at GM.
Kettering an inventive genius in his own right who designed the first
modern automobile ignition system, easily saw the value in the new paint,
and agreed to have GM start using it if a paint producer could be found to
manufacture it in quantity. The plan hit a snag when the big paint
companies balked, protesting that the new lacquer would force them to
retrain all their workmen and junk their current varnishing equipment.
Kettering decided that extreme measures were called for. He invited a big
paint company executive for a grand tour of GM, and when the man first
arrived, spoke to him about the range of colors possible with the new
paint, called Duco (from "DUpont COmpany"). Presenting the representative
with samples of the various hues, he asked the man which color he would
most like to see on his car if he had the option. The executive played
along and selected one. Kettering then commenced the tour, making sure to
take his guest through every part of the factory and explain its workings
to him in detail, and also treating the visitor to a lengthy gourmet lunch.
It was 4:3O pm in the afternoon before Kettering wrapped up the tour, and
when the executive got back to his car he realized instantly that something
had changed. Kettering had had it completely repainted in his guests color
of choice while the tour was underway.
The executive left convinced, and Kettering got his new paint. The first
car to be mass produced in a rainbow of colors was the 1924 Oakland, but
within two years virtually every other car manufacturer had adopted the new
process. Henry Ford, ever distrustful of change, was one of the last to do
so, waiting until the end of 1926 before making the Flivver available in
color again.
GMs New Management
While Durant can scarcely have been happy about being ousted from his own
company, he at least left it in good hands. Alfred P. Sloan, who became
GM`s president in 1923, was a genius of management who took a debt-burdened
corporation swiftly back to prosperity and then on to an industry lead that
lasted nearly sixty years.
Sloan realized that GM`s biggest advantage over Ford lay in the wide
variety of models and styles it produced, enough to satisfy nearly every
taste and pocketbook. To shore up his company`s relatively weak economy
car line, he premiered the affordable Pontiac in the early 1920s. He also
instituted the idea of making new models yearly and using advertising to
sow discontent with the older ones, introducing the concept of planned
obsolescence to ensure a market that would always be hungry for new cars.
Henry Ford disdained this idea, claiming that, "The man who buys one of our
products should never have to buy another. It was a rather naive statement
from a man producing 1.8 million new cars each year, but perhaps
understandable given his long success with a singlew car model. But
Sloan`s strategy would prove to be more viable than Ford`s within a very
few years, as rapidly declining sales of the Model T in favor of GM cars
attested. By 1927 GM had overtaken Ford as the industry leader.
Although a good thing for the automobile industry, this new attitude
towards cars which viewed them as a disposable commodity was perhaps not so
beneficial to the American consumer in the long run. By the time the
decade ended, emphasis in the car companies had shifted away from
long-cherished values of durability and economy to the newer ones of style
and short term salability. In terms of mechanical endurance, the cars
prodced in 1929 were often inferior to ones produced fifteen years earlier,
but the public didn`t mind. When credit buying allowed the average family
to get a new car every year if they wanted it, who cared if the car would
be worn out in five? In the immediate future, the new attitudes of the car
manufacturers would contribute to the Stock Market Crash in 1929. In much
later years, the emphasis on style over quality and practicality would give
Japan the opening it needed to bring down the American Auto King.
Ford Takes Over Lincoln
The depression of 1920 was as hard on Ford as it had been on GM, forcing
Henry Ford to resort to drastic measures. He started by slashing prices on
the Model T until they were being built at a loss and making up the
difference on spares, but even that didn`t keep him from having to shut
down factories. He then devised a policy of requiring his dealers to pay
for each load of cars in cash, up front, which was a tremendous hardship on
tbe dealers. Any that dared to complain were threatened with the loss of
their dealership if they did not do as ordered, and most found a way to
stick it out until things improved.
Harry Lelands Lincoln Motors was not so fortunate. Although his luxury
automobile was a good car, it was not particularly innovative, and 1920 was
a terrible year to try to launch a new automobile make. By 1921 the
company was struggling to stay afloat, and the final blow came in the form
of a botched tax assessment requiring his company to pay $4,500,000, a full
nine times the correct amount. Before the error was rectified, Lincoln
Motors sank into receivership.
Henry Fords wife was a dear friend of Harry Leland`s wife, and she resolved
not to let the Lelands go under. She brought tremendous pressure to bear
on her husband in an effort to convince him to bail out Lincoln. Ford
eventually did as she asked, but he waited until Lincoln went into
receivership so that he could buy the company outright. Earlier, Leland
had approached Ford for a loan which could have saved the company from
receivership, but Ford refused, knowing full well that a loan would not
give him full control over the business the way that buying it would.
Late in 1921 the deal was closed and Lincoln became a Ford property. At
the time the Deal was made, Henry Ford promised that he would keep Harry
Leland and his son Wilfred in charge of their company, but nothing was put
down in writing and Henry reneged on his promise in a shameful manner. He
refused to allow either of the Lelands a voice in Lincoln, instead ignoring
them completely. The Lelands, deeply regretting their decision to sell,
tried to buy the company back from Ford for the purchase price plus
interest only a few months after Ford bought it, but Ford wasn`t in the
least interested in selling.
When a messemger came from Henry Ford`s office in 1922 saying that Wilfred
Leland`s services were no longer required at Ford, Harry Leland walked out
the same day, as Ford no doubt expected. Ford had absolute and uncontested
control over Lincoln. Henry Ford`s motivation for his treatment of the
Lelands can only he guessed at. It may have been that he was growing more
power obsessed as he aged, or perhaps it was some long delayed revenge on
Harry Leland for working with William Murphy to build Cadillac from the
remains of Henry Ford`s second company back in 1901. Fore whatever reason,
it was the end of the Lelands, who were deserving of a better fate.
Farewell to the Flivver
For the first fifteen years after it appeared, the Model T Ford ruled the
American road. But fifteen years is a very long time in an industry
advancing as quickly as the American auto industry was doing, and it was
inevitable that the Flivver would eventually fall. If Henry Ford had
possessed more foresight, he would have been better prepared when the
American public began to reject his car; but out of what seemed to be
willful blindness on his part, the Automobile King stubbornly refused to
admit that times were changing. He continued to produce the Model T long
past the time when any other manufacturer would have seen that its
popularity was waning.
The Model T, unchanged in all but the smallest details, was produced for
almost twenty years, The last car, number 15,007,003, officially rolled off
the line at the Highland Park factory on May 27, 1927 (although in fact
production continued until June), and it was possible to buy brand new
Model T engines from Ford as late as 1941! Back in 1909, Henry Ford had
lost a minor parent suit to one Frederick W Ball, who invented a small part
that Ford used in his Model T transmissions. To settle the suit, Ford
agreed to pay $1 to Mr Ball for each Model T built, neither Ford nor Ball
could ever have predicted that over 15 million of the cars would be built,
and that Ball would thus be made a millionaire many times over.
One factor not already mentioned that contributed to the decline of the
Model T was the emergence of the used car market. By the early 1920s, a
buyer could get a secondhand vehicle of better quality and style for the
same price as a brand new Flivver. Other companies fought back against
this problem by introducing the yearly model, but Ford disdained this
strategy and refused to employ it, to his company`s detriment. More
Chevrolets were produced than Fords for the first time in 1925. Ford`s
refusal to make an enclosed car or update it in other ways (such as using
the new color paints) gave GM an opening that it pursued eagerly, learning
and profiting from Ford`s mistakes.
When Henry Ford finally gave in and admitted that the day of the Flivver
was past, he did so with poor grace and a marked lack of good sense. In
what might best be described as a fit of pique, he held off on launching
his new car, the Model A, until six months after his factories had shut
down Model T production. His actions caused 23 assembly plants across the
nation to close, throwing an estimated 60,000 men out of work, and forcing
his dealers to survive by selling nothing but spare parts! The unnecessary
discontinuity in production cost the Ford Motor Company an estimated $250
million and its claim to the mantle of industry leadership which General
Motors gladly assumed.
By the time the Model A emerged in December of 1927, people were so eager
to see the first new Ford since the Model T that huge crowds gathered
around the showrooms for a glimpse. Although the Model A was not terribly
innovative by the standards of the day, it was a vast improvement on the
Model T, and its status as the Flivver`s successor practically guaranteed
that it would be bought in large numbers. It was sufficiently popular that
when the new U.S. currency was designed in 1928, the picture of the
Treasury Building that was created for the back of the ten dollar bill was
engraved complete with a Model A Ford parked in front.
Much of the potential car market in America was still unsaturated by the
end of the 1920s. The average man had managed to get a taste of the
freedom of the open road, but he still often had to contend with poor
roads, undependable vehicles, lack of mechanics to repair them, and a
scarcity of replacement parts. The top speed of an average automobile was
around 35 mph. Clearly there was room for improvement but advances would
have to wait, as there were bigger problems ahead for the auto industry,
and the rest of the United States as well.
The Great Depression Strikes
In October of 1929 the United States finally paid the price for the wild
overindulgence of the American public in credit buying and the uninhibited
rise of stock market speculation. On Black Tuesday the New York Stock
Exchange crashed and the Great Depression was underway. In the year of the
crash Detroit produced five million new automobiles, and one out of every
five people in the United States owned his or her own car. A year later
production had sunk to three million, and by the depths of the Great
Depression in 1932 it was down to just over one million, the lowest it had
been in ten years. Many car companies that managed to survive the twenties
found the rug pulled out from under them.
Although the ruined economy caused new car production to plummet, the
number of cars actually in use stayed remarkably constant throughout the
worst years of the Depression. For many families the car was the last
possession to be sold, as it could be used to travel long distances in
search of work. In a pinch, it could even be lived in.
Once the worst was over recovery for the auto industry came slowly but
steadily. By 1937 production had risen to four million and in 1941, the
year before America entered World War II, it was almost back up to
pre-crash levels. 1941 saw several production milestones passed, such as
the production of the four millionth Plymouth, the five millionth Dodge,
and the twenty nine millionth Ford. Chrysler somehow managed to maintain a
strong research and development department throughout the Depression and
pioneered several innovations such as overdrive and a novel type of engine
suspension. In 1933 Chrysler`s sales surpassed Ford`s.
Perhaps as a response to the harshness and lack of amenities in the
Depression, the biggest changes on the automobiles of this time came in the
area of driver and passenger comfort and conveinience. Heaters,
air-conditioning, powered windshield washers and wipers, and defrosters all
debuted during the thirties. Car radios were first offered by the
Philadelphia Storage Battery Corporation in 1927 and by 1935 it was
estimated that there were more than one million radio equipped cars in the
United States. Several early versions of the automatic transmission became
available to car buyers, although the prototypes were prone to breakdowns.
The technology was greatly improved during World War II, and by the 1940s
the first modern style automatic transmission, virtually trouble free, had
Changing Styles
Right in the middle of the decade as the nation was starting to climb,
however painfully, out of the Depression, two cars appeared on the market
that would greatly influence modern styles and forever change the way that
car bodies were designed. As has been the case with automobiles almost
since their inception, being ahead of their time resulted in both cars
becoming commercial failures.
In the early 1930s a Chrysler engineer and designer named Carl Breer
pioneered the idea of wind Tunnel testing. His earliest trials with
typical cars of the day revealed that they were more aerodynamic going
backwards than forwards, and Breer resolved to change this by designing a
"back to front" car. The result, in 1934, was the Chrysler Airflow, the
first automobile to employ streamlining. The Airflow had, in addition to
its dynamic styling, all-steel construction and the first automatic
overdrive ever featured on an American car.
Unfortunately for Chrysler, the car was late to arrive in the showrooms,
giving its competitors time to spread disparaging rumors about it and, as
luck would have it, the first deveral thousand Airflows to be produced did
in fact have some serious construction problems. Although the
manufacturing errors were quickly eliminated, the car developed a
reputation for unreliability that, when combined with its drastically
different look, was enough to assure poor sales. The car never earned a
cent for Chrysler.
The other revolutionary car of the period was the Cord 810 produced in
1935. Designed by the maker of the Duesenberg, it was intended as a cheap
version of the famous luxury car. The style was radically different from
anything seen before. It included a "coffin nose" hood, horizontal
louvers, headlights that disappeared into the fenders, no running boards,
and a fastback sedan body. It was voted the best looking car at the New
York Auto show in the yeat it premiered, and in 1951 the New York Museum of
Modern Art recognized the design as one of the finest examples of
industrial styling of all time.
One other style of car which arrived in the 1930s was the station wagon,
often called a "woody" because its body was made of wood. The station
wagon did not become a passenger car until the 1940s, being considered at
first a utility vehicle like a truck or van. It gained popularity first
with farmers, explorers, film studios, and hotels, until by the late 1940s
ordinary consumers had adopted it as the perfect family car.
Fords New Engine
In 1932 the presidency of the Ford Motor Company was taken over by Henry
Ford`s son, Edsel. The transfer of power was in name only; in most
respects, Henry Ford still ran the company as he always had. Edsel
struggled against his father`s control during all his years as president,
but only rarely succeeded in bucking the wishes of iron willed Henry.
In the same year Ford introduced the first V8 engine available in an
economy car. V8 engines had first been introduced in 1914 by Cadillac, but
had remained an option only for the wealthy until Ford began to build them.
The reasoning Henry used to arrive at this decision was typical of him:
"We`re going from a four to an eight because Chevrolet is going to a six."
Henry's business strategy could often be summed up as one of not doing what
anyone else was doing. He avoided such worthwhile innovations as hydraulic
braking and longitudinal springs solely because the competition all had
The Ford V8 gave excellent performance for the price range, and the other
manufacturers took a while to catch up. In spite of Ford`s image and
performance advantages, however, sales continued to slip - Chevrolet sales
topped Ford`s in every year of the decade except 1935, and from 1936 on
Ford ranked third behind GM and Chrysler in overall sales. The main reason
for this was that Ford only produced two makes, as compared to six for GM
and four for Chrysler. The cheap Ford and the expensive Lincoln left a
huge gap in the middle of the market, and the other companies prospered by
filling it. In the hopes of regaining pre eminence in the field, Ford
introduced a third make in 1938 to bridge its price gap, and called it
Part of Fords difficulty in profiting from the V8 lay in the fact that the
cars were valued for their performance by high schoolers and college kids,
but as consumers these groups could rarely afford to buy new. Another
customer base that appreciated the V8 for its performance, but which Ford
could not depend on for income, was the criminal underclass - Bonnie and
Clyde drove a V8 Ford, as did John Dillinger. After becoming Public Enemy
Number One, Dillinger wrote to Ford, saying. "Hello Old Pal, you have a
wonderful car. It`s a treat to drive one." Of course, Ford had its better
class customers as well; the President drove a Ford V8, as did famous
aviator Charles Lindenburg.
There were a few other factors that may have contributed to the decline of
Ford in the thirties. For one thing, Henry Ford`s public image became
tarnished by his vicious anti-union actions, and also his outspoken anti
Semitism. For another, in spite of their excellent engines, his cars were
in other ways behind the times technologically, with outmoded suspension
and brake systems.
Ford`s other notable product in this period was a new model for its luxury
line, Lincoln. In 1939 Edsel Ford took a standard Lincoln Zephyr
automobile and instructed a friend of his to redesign it according to some
ideas Edsel had in mind. The car was originally intended to be for Edsel`s
personal use only, but a number of his friends saw it and were delighted
with the new styling. Over two hundred orders were placed for the car
before anyone even had any idea that it would ever be produced! Responding
to the enthusiasm for the car, Ford instituted a limited production run and
the Lincoln Continental was born. The car sold on styling and image alone,
since otherwise it was identical to the Zephyr.
WORLD WAR II AND AFTER : 1941 - 1950
By 1939, the "Big Three" had consolidated their hold on the American auto
industry had accounted for 90% of auto sales. Five smaller makes fought
over the remaining 10% of the market And then for three and a half years,
all American car manufacturers abandoned their rivalry and joined together
in a huge effort to supply their country`s needs for war.
Detroit Goes to War
On December 7, 1941 the United States entered World War II. Two months
later all automobile production except for military vehicles ended as
Detroit shifted over to war production. The impact of the American
automobile industry on the United States war effort was enormous. Over $29
billion worth of military materials, including planes, jeeps, tanks,
ammunition, and parts and supplies of all types were produced in Detroit -
one-fifth the total American output for the entire war.
By the time passenger car production was again sanctioned, on July 1, 1945,
the pent up demand for new automobiles was tremendous. But before the
carmakers could start supplying automobiles to answer that demand they had
a few hurdles to cross. For one thing raw materials, especially sheet
steel, were hard to come by. For another, the forces of labor had started
to become organized and were readying themselves for a big battle with the
auto industry.
Ford started its produclion lines again only two days after the
restrictions were lifted. GM waited until October 1945, but in November
the company was hit with a nationwide strike called by the United Auto
Workers, who had organized ten years previous but were still struggling
unsuccessfully to gain official recognition. Chrysler, out of fear of
similar strikes, put off restarting its lines for even longer. Throughout
1946 strikes at auto plants and parts manufacturers made production highly
undependable. By the time the year was up, however, the guaranteed minimum
wage and forty hour work week had been agreed upon and the worst of the
labor strife was over.
The final thing the carmakers had to contend with was the postwar Truman
administration. Thanks to the shortage of such vital materials as sheet
steel, car production costs were sky high in 1945. The Office of Price
Administration however, handed down a decree stating that new car prices
should be based on 1942 costs "It costs us $1,O41 to make a car",
complained Henry Ford II, new president of Ford Motors, "but we are
restricted to selling it at a maximum of $780." In 1947 the price controls
were lifted and the auto industry could at last get back to serious
Postwar Boom and Bust

The demand for new automobiles was so high in postwar America that
practically anything on wheels could and did sell. Numerous new carmakers
appeared on the market flourished briefly, then sank when the boom eased
off a few years later. The bust following the boom also killed off several
venerable luxury carmakers such as Packard and Studebaker, as their
customers deserted for Cadillacs and the Lincoln Continental.
The first cars produced immediately after the war were built from prewar
designs. Truly new car models did not appear until the years of 1946 to
1948. Several of the new features of the postwar designs became
trademarks: the portholes just ahead of the front door on the Buicks were
standards of the make from 1948 to the 1970s, and Cadillac acquired its
famous fins. Chrysler lost ground to Ford steadily in this period,
dropping to third in 1950 as Ford surged up to second. The lost sales can
be attributed to a combination of Chrysler`s failure to bring out a new
model until 1953 and the revitalization of Ford that occurred during this
period with the advent of Henry Ford II as the company`s new President.
Edsel Ford passed away prematurely at the age of 50 in 1945. His son,
Henry Ford II, then a 28 year old ensign in the U.S. Navy, was released
from his duties to assume the presidency of Ford in his fathers place.
Henry II, unlike his father, had been allowed to attend college and had
graduated from Yale before joining up. When he arrived at Ford he found
the companys management moribund and extremely inefficient, and at once set
about cleaning house. Unlike Edsel, Henry II had little to fear from his
grandfather who was by that time old and growing infirm.
One of the first things Henry II did was fire Harry Bennet, the first
Henry`s much feared and disliked security chief. Then in 1946 he brought
in a group of ten young outsiders, known collectively as "The Wizz Kids" to
revamp the company from the ground up. The group included prominent
academics from Princeton and Harvard, as well as future U.S. Defense
Secretary Robert McNamara. The whiz Kids, led by Henry II, made a sweeping
reorganization, adopteD GM`s decentralized management svstem, improved
labor relations, ad stabilized the company`s shaky finances. In 1949 Ford
sold over a million cars, the first time that mark had been passed since
1930. The following year, Ford recaptured second place from Chrysler,
although the Whiz Kids never did quite succeed in their aim of beating GM.
An average 1949 car in the U.S. cost $1,800, had an eight cylinder engine,
a heater, and a radio. Many had automatic transmissions. Around 1950 the
first of what we would now consider "economy cars" small in size, durable,
and fuel efficient started to appear in Europe. In America by contrast,
cars were approaching their peak in size, were often covered with two tone
paint schemes and gleaming chrome on every surface, and were generally
notorious gas guzzlers.
Americas roads received another boost from the government in 1956 with the
passing of the Interstate Highway Act, which provided federal money for a
nationwide system of four lane superhighways. The nation`s road network at
the time topped out at approximately three million miles. The American
consumer wanted big, powerful cars, to travel long distances in speed and
confort. Conspicous consumption, particularly with respect to one`s
automobile, was the rage. Gadgets of all sorts proliferated, power and
prestige became emphasized over utility and real performance, engines got
larger, and body styling became more than a little outrageous.
The idea of the "dream car" or "concept car" made its first appearance in
these years. These were vehicles never intended to go into mass
production. Some of them were even missing such details as a working
engine. The purpose in building such a car was to test a new engine
concept or sample the public`s reaction to a new body styling, or sometimes
just to suit the fanciful whim of a chief executive
Americas First Compact
Until 1950 all American cars came in basically a single size, and that size
was "Big". The wide variety in body size that can be found today was
completely unknown. The first relatively small American car to find a
market was the Nash Rambler, launched in 1950.
George Mason, president of Nash car company (one of the few independents to
survive past the end of the postwar boom)" knew that small cars had never
been successful on the American market He reasoned that his failure was due
to the marketing of such cars as cheap vehicles, which thereforevmarked the
buyer as someone of limited means. The key to selling small cars, Mason
thought was to build a small car that people would buy because they liked
it, not because it was inexpensive - and thus was the Nash Rambler born.
The Rambler wasn`t an expensive car but it did cost more than the bottom
line Fords and Chevrolets and so did not appear "cheap". It sold very well
for Nash in 1950 and 1951, but by then the other independents had learned
from Nash's success and brought out compacts of their own, cutting into
Nash`s market. In 1955 the Rambler was discontinued, just after Nash
merged with Hudson to form American Motors. Three years later the Rambler
was reintroduced and did even better in its second outing than it had in
its first, selling briskly from 1959 - 1961. Its success, coupled with the
success of a diminutive German invader called the Volkswagen Beetle,
prompted the Big Three to launch their own compacts in 1959.
The Sports Car and the Youth Movement
The heart of the Car Culture in the United States was the growing
independence and freedom of movement that American youth found with the
wheels of their choice. The car and its care and feeding became the
centerpiece of an entire way of life for millions of Americans between the
ages of fifteen and twenty-five.
High-schoolers and college age kids found happiness in one of two types of
cars: either the big boat like vehicle into which six to eight people
could be packed along with supplies for a trip to the beach or to the
movies, or the speedy two-passenger sports cars which appeared late in the
decade. The Ford Galaxie was a good example of the first type of car,
while the two sports cars of choice were the Chevrolet Corvette and the
Ford Thunderbird, both of which premiered in 1954.
The Corvette was designed by GM style chief Harley Earl, who was hoping to
design a low priced sports car suitable for his college aged son and his
friends. His initial design was exhibited as a concept car in 1952 and was
such a hit that Chevrolet went into production the next year. To save
weight and cost, the Corvette had the first all fiberglass body.
The new car was priced at $3,440, a disappointment to Harvey Earl who had
hoped for some thing closer to $1,000. The early "Vettes" though prized by
collectors, were not considered very good cars by the people who made them.
But the 1956 Corvette had a V8 engine gave the magic advertising figure of
one horsepower per cubic inch, and sales took off. The 1957 model featured
more improvements including better suspension, fuel injection, and a four
speed transmission. It could go from zero to sixty miles per hour in 5.7
seconds, a respectable figure even by today`s standards. In 1962 the
Corvette engine was placed in an all new body and released as the Sting
Ray, which became the single word Stingray by 1969. The Stingray stayed in
production, almost unchanged, until 1983.
The Thunderbird, which debuted in the same year as the Corvette, had a
regular steel body but a bigger and better performance engine than the
original "Vette. It also cost about $500 less, a significant difference to
a young person with a limited income. The Thunderbird only stayed a sports
car for the first three years of its life, and then it became a four
passenger convertable.
The Car Culture even had its own sacred hymns, sung by the likes of the
Beach Boys and Jan & Dean: "Little Deuce Coupe", "Shutdown" "Fun Fun Fun"
"409" "Dead Mans Curve", and "Little GTO". The latter was a tribute to a
Pontiac car that owed its name to a stroke of advertising genius by then
Pontiac General Manager John Z DeLorean.
The initials "GTO" were originally used by the Italian carmaker Ferrari.
The acronym stood for "Gran Turismo Omologato" or homologated Grand
Touring, and was a designation used on Ferrari racing cars that made it
into general production. The car was DeLoreans special baby and he snuck
the design through when his superiors weren`t looking. By the time they
learned of it, it was already in production and much too late to stop.
Sports car enthusiasts raised an enormous row about Pontiacs usurpation of
their beloved letters, but as "Car & Driver" magazine pointed out, the
Pontiac GTO could beat a Ferrari on a straightaway and the Ferrari cost
five times as much. The letter stayed
Fords Infamous Edsel
The Ford Motor Company was doing much better in 1954 than it had been in a
long time, thanks to Henry Ford II and his Whiz Kids. But it still had not
caught up with GM. It was decided that ford needed a second middle priced
car to accompany the Mercury, as GM had three cars in that range (Pontiac,
Oldsmobile, and Buick).
Great effort was expended in selecting a fitting name for a brand-new Ford
marque. Ford`s advertising agency supplied a list of 6,000 to choose from,
including several names that were eventually used elsewhere, such as
Citation, Pacer, and Ranger. Market research manager David Wallace
contacted poet Marianne Moore to ask for suggestions and received back of
list of possible names including "Intelligent Whale", "Resilient Bullet",
"Mongoose Civique", "Taper Racer", and finally in a burst of inspiration,
"Utopian Turtletop". Miss Moore had declined any fee for her help, saying
it would inhibit her creativity. Although none of her suggestions were
even remotely usable, there seemed to be no hard feelings either way for at
Christmastime the poet received a large bouquet of red roses with a card
attached saying "Merry Christmas to our favorite Turtletopper".
Eventually, despite objections from the Ford family, the name Edsel was
chosen in honor of Henry II`s father.
Unfortunatly Ford did not put nearly as much effort into the actual car as
it did into the name. To economize, bodies and engines were mostly from
other Ford and Mercury cars. The distinctive horse collar grille was
intended to be the car`s mark of distinction, but it was not a particular
good choice. Edsel production was mostly done hastily at the end of the
day and as a result often suffered from poor quality workmanship. It
quickly acquired a reputation for unreliability.
The car was widely hyped, but it was not really an innovative car in any
true sense of the word, being made as it was from parts of other ordinary
cars. Ford`s timing was nothing short of terrible - the Edsel was a big
car, and the day of the compact was just around the corner. At the time
the Edsel was being developed, the midsize car accounted for 40% of the
market; by the time it debuted, that had dropped to 25%. The Edsel did not
sell and stayed in production only until 1960. The failure of the new
marque may have cost Ford as much as $250 million.
The demise of the outmoded Edsel in 1958 heralded the beginning of the new
age for the automobile. American cars had become nearly too big to drive,
too clumsy to operate, and too expensive to maintain. Consumers began to
look for something different. It was during this period that European cars
reappeared on the American automobile scene, in small numbers at first, and
then in waves of increasing size.
At the beginning the American auto companies seemed to be up to the
challenge presented by the new preference for compact cars, but their early
triumph was not destined to last. This decade was the time when the
confidence of the US automakers began a dangerous downward slide into
complacency. The emphasis on year-end profits and the tyranny of cost
accounting management led to a distinct short-sightedness. Capital
investment was discouraged, no new machine tools were designed or
purchased, and research and development departments went begging for funds.
By the time the 1970s rolled around, the Big Three were long overdue for an
unpleasant wake up call.
THINKING SMALL : 1959 - 1964
The Compact Revolution in the U.S. auto industry came ahout as a response
to the success of the Nash Rambler, combined with the disturbing appearance
of small European economy cars on the American market in increasing
numbers. Until WWII the only imports sold in the U.S. were large luxury
cars such as Mercedes, Minerva, Renault, and Rolls Royce. After the war
the import market focused on sporty cars such as the MG Midget and the
Jaguar XK120. The first imported economy car to make an impact on the
American market was the tiny Volkswagen Beetle - and that impact, small at
first, soon mushroomed to enormous proportions.
The Little Car That Could
The Volkswagen car got its start in 1930s Germany, when Adolf Hitler
commissioned Dr. Federnand Porsche to develop a cheap "people`s car" (the
literal translation of Volkswagen) in order to keep automobile money inside
Germany. The cars were first built in 1938, but only about 100,000 VWs
were made before WWII arrived, halting production.
After the German defeat the Volkswagen plant was offered up as part of
payments for war damages, but the American and British experts scorned the
offer, declaring the little car to be worthless. Shortly thereafter, in
1945, a handful of people who had been employed by VW before the war
requested permission to go back to producing cars, and were granted it.
The VW factory had been bombed during the fighting, so when the workers
returned they found the plant barely usable with blown out windows and a
damaged, leaky roof. Nevertheless, they set to work. Due to the severe
materials shortages, their first handful of cars were built entirely from
salvage parts. This lack of supplies forced them to concentrate on a
single model, and they chose the one that had been the most popular before
the war, the little VW 1200 Beetle.
By the end of 1946 they had somehow managed to raise production to 10,000
cars. The next year the Allied Government stepped in and put Heinrich
Nordhoff, former head of GM`s German line, Opel in charge. Nordhoff opened
markets throughout Europe to bring in foreign money to stabilize Volkswagen
and the company never looked back.
The Volkswagen was the first car built to create a market, not to fill a
need. Like the Model T before it, the Beetle was simple in design, plain
to look at, and economical to operate. It was introduced in America in
1949 and its sales were slow for several years thereafter. Volkswagen
persevered however and in 1960 half a million Beetles were sold in the
United States. The "Bug" became a huge favorite on college campuses, and
by the time the decade wore out five million of the funny little cars had
been purchased by American consumers. Then in 1972 the Beetle did the
unthinkable, stealing the title of most popular car ever by exceeding the
Model T`s record of fifteen million cars sold. By the time the series was
discontinued in 1978, 19,200,000 Beetles had been produced
The "Big Three" Respond
The success of the Nash Rambler and the VW Beetle combined with the
encroachment of other European compact cars on the American auto industries
territory convinced General Motors, Ford, and Chrysler that some sort of
response was called for. It came in 1959 as all three companies, acting
almost in unison, each introduced a new compact car for the 1960 season GM
produced the Chevrolet Corvair; Ford, the Ford Falcon; and Chrysler, the
Chrysler Valiant.
The Valient was a standard Chrysler car engine and chassis with new styling
and construction. The Chevrolet Corvair was more unorthodox, with a new
body and a novel rear mounted flat six air cooled engine. The Ford Falcon
was the most conventional in design, but even with that it was a full two
feet shorter than the Ford Fairlane. The Falcon was the dullest, but sold
the best of the three; in its first year it represented nearly half of Ford
sales. In later years, new Ford vicepresident Lee Laccoca spruced up the
Falcon`s look to make it more exciting and sales went up still further.
All Three cars were an unqualified success, proving that the time of the
compact had arrived. The European competitors quickly faded from the
scene, with the singular exception of the hardy little Beetle which
actually increased its market share during this period.
The success of the compact cars, which later evolved into the so called
intermediates, led to an expansion in available automobile types. In the
early 1950s, a car generally had one body shell which could be made in four
door sedan, two door coupe, topless convertable, and station wagon, all
fitted on top of one engine and chassis. When a range of engines became
available at the start of the Sixties, two new classes of cars appeared,
categorized more by engine type than body type. The "pony car" was a
powerful engine fitted into an intermediate coupe or compact body shell,
while a "muscle car" was a powerful engine fitted into a sedan body.
The first "pony car", was, of course, the Ford Mustang, from which the
class derived its name. Some historians have called the Mustang the most
significant American car of the 1960s, for it did what the designers of the
Edsel had tried (and miserably failed) to do: it captured the spirit of
the times.
The Mustang was the baby of vice-president Lee Lacocca. Laccoca started as
a Ford salesman in Allentown Pennsylvania, and made a vow to himself that
he would be a Ford vice president by his thirty fifth birthday. He missed
the mark, but not by much - his promotion to VP can through just eighteen
days late. Lacocca, young himself, was devoted to the concept of "thinking
young" and realized the the Baby Boomer children born in the post war years
were nearing driving age and would want something different from their
parents. At the same time women were becoming professionals in larger
numbers than ever before and acquiring buying power and they too would be
looking for a car of their own. Lacocca reasoned that a small,
individually styled car without the family sedan image of existing compacts
might fit the bill for these consumers.
The original Mustang design was tested by racing drivers, who loved it.
But Lacocca reasoned that a car beloved by racing drivers might not be
quite right for the average American, so the Mustang went back into design,
re emerging in 1964 to instant runaway success. It was available in an
enormous variety of options, so that each car could be customized to the
buyer's personal tastes and requirements. Five engines were offered, plus
six transmissions, three suspension packages, three brake systems, three
wheel sizes, and many other comfort and performance option. The simplest
unenhanced Mustang sold for $2,368, while a souped up version could cost as
much as $3,850. More than 100,000 Mustangs were sold in the first four
months of production, and more than a million in the first year. Chrysler
and GM rushed to jump on the bandwagon, launching the Chrysler Camaro and
the Pontiac Firebird as competitors.
By the early 1960s, cars had been in common use in America long enough for
some of the difficulties associated with their operation to become
apparent. Traffic congestion became a problem, causing road surfaces to
degrade and eroding the automobile's great advantage door to door
transportation. For example, according to New York City`s Department of
Transportation, the average speed of horse and buggy in downtown Manhattan
in 1907 was 11.5 mph. Today, the average speed by car in Manhattan`s
overcrowded streets is 9.8 mph, while the average for horses remains the
same. And elsewhere in the country, Southern California discovered to its
dismay that its reliance on the automobile combined with its local air
patterns was rapidly depriving the people who lived there of the
opportunity to breathe.
Automakers, concerned as always with sales and little else, steadfastly
ignored any problems associated with their cars or the use thereof,
considering it the consumer`s business to look out for himself "Caveat
emptor" were the watchwords for the Big Three and the smaller manufacturers
as well. But the 1960s were a time of great social activity in the United
States, and it was inevitable that eventually the eye of the activist would
fall upon the American auto industry. When it did, it did not like what it
saw. Before the decade was out, the Big Three would discover themselves
wrestling with new legislation designed to force them to pay more attention
to issues they had rarely considered in the past, such as automobile safety
for both passengers and pedestrians, and engine exhaust emissions.
The new legislation caused significant changes in the way new cars would be
designed in the future. Until the mid 60s, car design was dictated by
consumers and accountants, with engineers and stylists balancing between
what the public wanted and what the carmakers could afford to produce for
them. With the advent of the new laws, car manufacturers were suddenly
presented with a third factor to figure into their designs. By setting
mandatory standards for safety and pollution, Washington spurred new
developments in the fields of engine design, body design, and safety
devices such as seat belts and air bags. Without this impetus, such
advances might have arrived decades later or not at all.
Nader the Raider
For many years, the prevailing wisdom in Detroit was "safety doesn`t sell
cars". As far back as the 1930s the Airflow had touted its all steel body
as a safety feature and by 1952 Nash and Muntz had installed passive seat
belts in their automobiles, but neither advance helped the cars sell.
Things would change radically in the midsixties, starting in 1965 when a
crusading young lawyer named Ralph Nader researched the automobile
industry`s history on safety and wrote a book, Unsafe at Any Speed,
detailing his findings.
Nader concluded that although the big companies had the technology, money,
and personnel available to make their cars significantly safer, they had
refused to do so even when their designs were close to negligently
hazardous. Specific targets of Nader`s book included Buicks undependable
power braking system, the famous Cadillac fins which impaled bicyclists and
pedestrians, and the rear swing axle on the Chevrolet Corvair. This last
problem was one of Nader`s paRticular demons, as the design flaw had been
pointed out to Chevrolet by one of its own engineers before The car went
intO production and the big carmaker had ignored the warning. The rear
swing axle had been used successfully in cars before, but the Corvair had
rear mounted engine and a body design that put most of the car`s weight at
the back of the vehicle; on a turn, the extra weight caused the inside
wheel to lean at a sharp enough angle that it could fold completely and
cause a deadly rollover. Nader`s attack, combined with the Corvair`s
higher production costs, drove the car off the market within a few years
After publishing his book, Nader testified before the U.S. Congress on
automobile safety and was influential in getting the National Traffic and
Motor Vehicle Safety Act passed later in the year. This law gave the
federal government the right to regulate the design of automobiles, trucks,
and motorcycles so as to protect the public safety. Since its passage more
than fifty safety standards have been imposed regulating safety
windshields, seat belts, head restraints, brakes, tires, lighting, door
strength, and roof strength.
Sadly, the new safety legislation wasn`t enough to prevent the tragedies
associated with the Ford Pinto. The Pinto, Ford`s entry into the new
subcompact field, made its debut in 1970. To save weight on the design,
Ford`s engineers had eliminated a number of rear subframe members from the
car`s body. This left the gas tank more vulnerable to compression and
rupture in a collision than it was on heavier cars. The gas tank also had
a filler neck that could easily tear loose in a crash and fill the
passenger compartment with highly flammable gasoline fumes. In the case of
a rear end collision, the Pinto could - and sometimes did - go up in an
explosive fireball.
One victim of a Pinto explosion sued Ford for negligence and won an award
totalling $128.5 million. On appeal the amount was reduced, but it still
cost Ford $6.5 million and an enormous amount of bad publicity. The bad
press got worse once Henry Ford II`s contemptuous views on automobile
safety became public knowledge, and The Ford company was a long time
Fumes and Furor
Safety considerations were not the only automobile issue to capture the
interest of the American public in the late 1960s. Driven by tales of
Southern California cities such as Los Angeles, where old people and
children could not walk outside on some days during the summer due to the
poisonous air, the federal government passed the Clean Air Act in 1970
establishing acceptable levels of exhaust emissions such as carbon
monoxide, nitrogen oxides, and hydrocarbons.
The Clean Air Act also set restrictions on leaded gasoline, the use of
which originated in 1933 when Charles Kettering of GM discovered that
adding tetraethyl lead to gasoline cured engine knock. Burning leaded
gasoline, however, spreads airborne lead into the atmosphere where it can
be taken up and absorbed into the body through the lungs. High levels of
lead are toxic, especially to small children, and lead from leaded gasoline
was a major contributor to the number of cases of lead poisoning in urban
children in America during the 1960s and 1970s.
The two easiest ways to lower levels of unacceptable auto emissions are by
lowering engine temperatures and by use of a device called a catalytic
converter, now standard equipment on American cars, which converts exhaust
fumes to water and carbon dioxide. The use of the catalytic converter
provided the other nmajor impetus for the abandonment of leaded gasoline,
as the lead in the fuel coats the active catalyst in the converter and
destroys the devices function.
In spite of two decades of air pollution legislation and the subsequent
improvement of air quality in many cities in the United States, the problem
is far from solved. Several Southern California cities, unable to find
another solution, are considering completely banning gasoline burning
vehicles from the city limits by the year 2010, which may lead to a revival
in the use of the electric car. Increased use of mass transport and
alternative, cleaner burning fuels may be other answers, as may be the
development of engines other than the standard internal combustion type
which run more cleanly, such as the Diesel and the external-combustion
Stirling engine.
To complicate matters even further, studies have shown that current methods
of emissions control may be drastically insufficient to solve the problem.
Catalytic Converters, though very beneficial, have a limited life span and
if not replaced, become useless and allow exhaust to pass through
unchanged. There is also concern that one of the by products of ctalytic
converters, carbon dioxide, may lead to global warming if production is
unchecked. Furthur research has indicated that problems may exist with
exhaust gases previously thought to be harmless: ozone for example,
damages crops and lowers air quality while, paradoxically,
chlorofluourcarbons emitted by automobile air-conditioners may be
contributing to the depletion of the planets natural high-altitude ozone
layer. Even with air pollution controls in place, automobile exhaust still
accounts for 90% of the air pollution in modern cities.
Although the United States would cling to her top seat in the world
automobile industry for nearly a decade yet, by 1970 it was already clear
that her grip on the position was slipping. America`s cars were still
examples of style over substance, built to break rather than last, bearing
gasoline thirsty engines, and suffering from bad publicitv due to the
public`s perceived indifference of the Big Three to concerns such as safety
and pollution control. The advent of the Japanese import in conjunction
with two serious fuel crises within five years would prove a one two punch
that would bring down the Auto King after nearly seventy years of
American Motors Tries Something New
The struggling American Motors was having a hard time competing with the
Big Three in 1970. The company`s executives decided to introduce a new car
into the market to compete with the VW Beetle instead, hoping that since
the Big Three appeared not to be interested in that part of the market it
would have a clear field.
Later that year the American Motors Gremlin appeared: It was an
odd-looking little car with styling charitable described as "controversial"
which was a nicer word than "ugly". The car's stylist defended its looks,
claiming that only an unconventional design would have garnered the car
enough attention to bring in the customers. That may or may not have been
true, but for whatever reason, the little car sold well enough to prompt
two of the Big Three to respond with designs of there own later in the
GMs offering was the Chevrolet Vega: while Ford brought another of Lee
Lacocca`s designs, the ill stared Pinto. Chrysler ignored the trend toward
smaller cars and unwisely offered no subcompact for several years to come.
Either because the new subcompacts were pushed through production in a
hurry or because the companies did not feel that the subcompacts were
worthy of heavy investments, neither car was very good. The Pinto's
disastrous safety flaws lead to multimillion dollar lawsuits and bad
publicity for Ford, while the Vega's problems included body rust, oil
leaks, rough engines and cylinder head warping.
Long Lines at the Pumps
It was unfortunate for the Big Three that they had not put more effort into
designing well made subcompact cars, because the first major oil crisis was
just around the corner. It would usher in the age of fuel conservation and
engine economy, and with the Big Three woefully unprepared for bthe change,
the door was opened for the Japanese carmakers.
When gasoline engines were first made in quantity, America`s domestic oil
supply was more than sufficient to provide for the country's needs.
Originally, the only use for petroleum was to make kerosene lamps, and with
the advent of the electric light even that use was declining. The arrival
of the gasoline engine gave the Petroleum industry a whole new reason to
exist. Today, gasoline comprises nearly a third of the total oil
consumption of the world.
As the car became more and more common in America, use of gasoline
naturally increased past the point where domestic oil reserves could
provide enough fuel for everyone. This point was reached and passed in the
1950s, but hardly anyone noticed because the discovery of new large oil
fields in the deserts of Saudi Arabia and other middle Eastern countries
ensured that fuel would continue to be plentiful. American consumers
failed to realize, however, that when oil became a precious commodity, it
became a source of power - power which had now passed out of American
The hard lesson was driven home in 1973 with the outbreak of the Yom Kippur
War between Israel and her Arabic neighbors. Oil stopped flowing to the
United States and to most of Europe as well not because the wells had gone
dry but because the Arab nations had decided not to sell it to the
countries that were supporting their enemy, Israel. Gasoline prices
tripled over a few months and people stood in line for hours to get fuel
for their cars. Some European nations, with no domestic oil supply,
resorted to banning driving entirely on Sundays. It was a rude awakening
for American gasoline consumers, abruptly forced to become aware of how
drastic their fuel needs had become and how great their dependence was on
foreign powers to supply it.
Large car sales went into an immediate downturn with the worst hit being
the Large sized, medium priced cars such as Ford`s Mercury. An economical
car suddenly seemed a much better choice than a powerful one.
Unfortunately, the American auto industry wasn`t building any dependable
fuel-efficient cars, nor was it prepared to do so in the near future. In
response to the crisis, the Big Three to start making plans to downsize
their product, but it would be several years before the changes would be
reflected in the creation of new, smaller cars.
The second oil crisis hit just five years later in 1978, brought on by the
struggle to overthrow the American supported Shah of Iran. Prices, which
never came down after the first crisis, tripled yet again. Then in 1980
Iran and Iraq, both major oil producers, went to war with each other,
stopping oil production from both countries and guaranteeing that the high
gasoline prices would continue for the immediate future. For the American
auto industry, there would be no turning back. The day of the gas guzzling
car was well and truly over.
The Rise of Japan
The entry of Japan into the auto industry started early, but stumbled badly
several times before finally achieving success. Japan`s first car was
built in 1902, an experimental model only that used an American engine.
Five years later a car was built for production but only twelve were made
before the company collapsed. By the early 1920s there were many tiny car
manufacturers in Japan, none of them supccessful.
The first automobile company in Japan to actually turn a profit was founded
in 1926, its product being an experimental car built by Kwaishinsha Motor
Works. The initials of the founders were combined to created the company`s
original name, DAT. Five years later DAT bought out a car named "Datson",
meaning, literally "son of DAT" and in the year after the name was changed
again to Datsun to honor the rising sun emblem of the country's flag. In
1934 DAT joined with the new Nissan company to form today's Nissan Datsun
The only other pre WWII car manufacturer in Japan was Toyota which started,
improbably enough, as a textile manufacturer. Its first offering was
brought out in 1935. The car looked like a cross between a Ford and a
Chrysler Airflow and by the standards of the West was a poor vehicle
It was not until the second World War that Japan's auto industry really
took off. The vast industrial and technological expansion that Japan
undertook in order to fight WWII formed the basis of its post war industry.
Production was very slow at first; only 215 Toyotas were built between 1947
and 1952. But during the 1950s Japanese engineers traveled to the U.S.
and began to study American production methods, and in 1953 Toyota
production had jumped to 16,500. Financing for Japan`s industrial
capitalization, expansion and modernization were provided by its government
and by low cost loans from the World Bank.
Once they had learned the basics of modern mass production methods, the
Japanese engineers went on to do what America's companies had failed to do:
improve on them as an example, Toyotas production manager, Taiichi Ohno,
developed stamping machines that could be easily changed to make several
different parts from a single machine. This saved on capital, since fewer
machines were needed and eliminated wasteful and inefficient stockpiling.
Conversion of one of Ohnos machines could be done in a few minutes instead
of the three hours or more it could take to convert a standard Detroit
Early Japanese marketing efforts were restricted to home, for only one
person in ten in Japan had a car in the 1960s, compared to one in two in
the U.S., one in five in West Germany, and one in six in Britian. Even as
late as 1967 only 11% of Japan`s car production was exported During the
1960s the Japanese car industry expanded and developed as new companies
were founded and older companies merged. Nissan took over Prince Motors of
Tokyo, Toyota absorbed Daihatsu, and the huge Mitsubishi company joined
forces with Isuzu Motors. Honda, ruler of the motorcycle market, began
making cars in 1962. In 1968 Toyo Kogyo, which began as a cork
manufacturer began producing the Mazda marque, some with Wankel rotary
The Japanese automobile got off to a shaky start in the United States. The
first Toyotas reached California in 1957 against the wishes of the car`s
designer who felt (rightly) that the vehicle was not ready to challenge the
U.S market. By American standards of the day, the early Toyotas were
poorly made , with engines so underpowered that they could not accelerate
fast enough to get on a freeway safely. Toyota dealerships were considered
only by the most desperate car dealers.
The turning point came in 1973, when Honda brought its subcompact Civic to
the United States. It was the right car at the right time, and sales
soared. Other Japanese automakers soon followed. American consumers
discovered that Japanese imports cost the same (or less than) American made
subcompacts, but were more durable, ran better, and were much more fuel
efficient Compared to the Vega and the Pinto, they seemed like wonder cars.
Word spread quickly among buyers and within a very few years the Big Three
realized they had a serious problem on their hands as sales of American
cars went into a steady decline. By 1980 Japan had passed the United
States in overall production and in 1987 imports accounted for 31.3% of all
automobiles sold in America.
Since the end of World War II the car industry has taken on an increasingly
global character. Cars are imported and exported from every major
industrialized country, and multinational ventures are becoming more common
every year. Foreign automakers have established links with U.S. firms and
all major Japanese manufacturers have opened plants on U.S. soil. A car
today may be owned by a company in one country, be designed by a company in
a second, be assembled in a third, and contain parts originating in five or
ten more. The heaviest concentrations of car owners are found in North
America, Western Europe, Japan, Australia, and New Zealand, all of which
have ratios of one car for every 2 - 4 people. China, by contrast, has one
per 2,000 people.
Countries with automotive industries include Japan, the United States,
Germany, Canada, France, Italy, Sweden, and regions of the former U.S.S.R.
America has the Big Three of General Motors, Ford, and Chrysler. Japan has
six major firms Toyota, Nissan/Datsun, Honda, Mazda, Isuzu and Suzuki. In
Germany, Volkswagen leads by a large margin, followed by Opel (GMs German
branch), Ford, Daimler-Benz (with Mercedes), and the Bayernische Motoren
Werks (BMW). France has Renault, Citroen/Peugeot, and Simca, while Italy's
only major popular car manufacturer is Fiat. Volvo and Saab are made in
Sweden, and South Korea, a very recent entry into the field, is doing well
with Hyundai.
The United Slates produced two thirds of all the world`s cars in 1950. By
1990 that fraction had dropped to one-fifth, although the total number of
cars built was about equal to that of 1950. For most of the early years of
the auto industry, Britain held the second place spot behind the U.S. This
lasted until Germany, building on the strength of the Volkswagen, seized
the position in the 1960s. In the 1970s Japan surged past Germany and
shortly thereafter the U.S. itself to take the lead.
Tough Times for Detroit
One quarter of the cars sold in the United States were made in Japan by
1980, an astonishing turnaround from just ten years before. The success of
the Japanese import can be attributed to two simple factors: first, they
had the right car at the right time to take advantage of a lamentable lack
of foresight on the part of American automakers, and second, they were able
to refine the mass production process in order to combine high output with
high quality control.
The U.S. government, alarmed by this threat to a major national industry,
in 1981 convinced Japan to impose restrictions on its automakers to give
American car companys time to retool and modernize their factories. In the
following year the United Auto Workers revealed the growing desperation in
the industry when they made major concessions to manufacturers, hoping to
help get the American auto industry back on its feet. Between 1978 and
1984 the Big Three spent a total of about $69 billion throughout the world
in an attempt to become competative, putting the money into product
redesign and plant modernization.
Since 1984 sales of American cars have been slowly rising, although it will
take them quite a while to regain lost ground, if indeed they ever do.
American carmakers recovered from earlier difficulties such as the Great
Depression, given time, but in those cases the slump was a world wide
phenomenon affecting carmakers everywhere in roughly the same way. Even in
the depths of the Depression, the American auto industry still turned out
more than twice as many cars as its nearest rival. This latest decline is
specific to the United States, a loss in global market share rather than a
general depression of sales, and as such it will be harder to recover from.
No one in the American car industry is giving up, however Lee Lacocca said
in 1988, "Americans are fat and happy" but that doesn`t mean America is
finished. When it gets tough, they will straighten out". His confidence
may or may not be justified. The matter is further clouded by the growing
international nature of the industry. In recent years, cooperative
marketing deals and production mergers between American companies and
carmakers from other nations have blurred the line between import and
domestic vehicles to the point where it is difficult to say where a car
actually comes from. All three major U.S. carmakers have international
plants and have sub-assemblies and parts manufactured by foreign
affiliates. Japan and South Korea have been the major partners, although
Europe and South America are in the process of joining them.
As of 1970 an American make of car was truly American made, designed and
built by Americans with all parts manufactured in the United States. In
contrast, in 1990 a Ford Festiva was a Korean built Mazda design, a
Chevrolet Turbo Sprint was a Japanese built Suzuki, and a Pontiac Le Mans
was a German designed Opel Kadett built in Korea! One of the main reasons
why foreign built cars are being sold as American is that the enormous cost
of retooling a factory can be avoided if an already-developed foreign
design is used. In 1990, cars of the Ford-Lincoln Mercury group came from
Korea, Mexico, Canada, Austria, and German as well as the U.S.. As of 1970
there were no foreign companies building cars on American soil, while in
1989 and 1990 the best selling American built car was the Honda Accord. In
1991 a Dodge Stealth was selected as the pace car for the Indianapolis 500
auto race, until it was discovered that most of the car was built outside
of the United States. A public outcry prompted a change to a Dodge V10
The decline of the American auto industry has brought about a similar
decline in Detroit; once the fourth largest city in America, it dropped to
seventh as job prospects, dwindled in the 1980s. Unless American carmakers
can accomplish the difficult task of regaining consumer confidence in their
cars. Detroit`s decline seems likely to continue. In America, imports
used to be purchased by people who either fancied "exotic" cars or who
wanted one as a status symbol. Today, it is Henry Ford`s "average man" who
buys a Japanese import - ordinary people in lean economic times trying to
save money on repair and running costs and maintain trade in values. There
has been a surge in new car designs and ideas emerging from Detroit in
recent years as the city strives to return to producing not only the most
cars, but also the best cars. Only time will tell if they will succeed.
If they do not, the next Detroit will be a city in Japan or Germany.
Regardless, the popular car will undoubtedly continue to be the
transportation of choice in modern nations for decades to come.
Typed by SHARD - DTL
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