April 30, 1925 – Dodge Brothers is sold for record amount…
An interesting transaction took place on this day in 1925 when Dillon, Read & Company, a prominent American investment bank, purchased Dodge Brothers, Inc. It wasn’t so much the actual sale that stirred interest, but the terms of the deal.
The car company sold for $146 million, plus an additional $50 million to be dispersed to various charities. At $146 million alone, the sale became the largest deal to date for any automaker. When adjusted for inflation, this totals about $2.7 billion today.
Dillon, Read & Company was an investment powerhouse in the 1920s. They had a reputation for other daring transactions in addition to their purchase of Dodge, which they turned around and sold to Chrysler three years later. This investment firm also earns credit for saving Goodyear Tire.
John and Horace Dodge found Dodge Brothers in 1900 and quickly found work manufacturing precision engine and chassis components for the growing number of automobile companies. This included Oldsmobile and Ford. The motor division was created in 1913. By the next year. the brothers debuted their first automobile. Their cars featured a 12 volt electrical system, all steel body construction and a sliding gear transmission, all revolutionary at the time.
Unfortunately for the Dodge brothers, they both died in 1920. Walter P. Chrysler’s purchase of Dodge in 1928 instantly made his new (1925) company a major player, eventually to outsell Ford for several years.
Yup!
Our school’s first auto shop teacher was an elderly guy who had grown up in the auto industry, and who claimed to have known both of the Dodge Brothers. He always referred to them as “a couple of alcoholic bums who mistreated people”.
Was that characterization correct? I have no idea, but that old guy was adamant in his opinion of them.
That’s what I have read. Must have been a treat for ole Henry who I don’t believe drank or not much. So how did Chrysler fair after 1929? A lesson, the market in general usually comes back if you can hang on.
My grandfather worked for Dodge for a short while in the 1920s. He had been a blacksmith in the Cambria coal mine in Western PA, then jumped at the offer to become a machinist at the Dodge plant in Hamtramck, MI. They eventually had a family meeting. My mother, grandfather, and too few of the children wanted to stay. My grandmother and enough children (there were 8), wanted to move back to Johnstown, PA, and they did. My mother was not happy. She, and I guess the others, were treated badly because their parents were immigrants. She moved to Philadelphia as soon as she could. The more things change….
They designed and built the Airflow to be introduced in 1934 at the New York Auto Show.
Voted Best looking car at the show. Also voted Worst Looking car at the show.
Technically advanced in many ways, but a sales failure. It was gone after 1937.
Chrysler sold 450,000 cars in 1929. Because of the Great Depression, sales dropped to 25,000 car in 1932. That is a LOT of empty assembly lines!
And, Walter P. Chrysler himself died in 1940. But, he definitely left this mark, with NYC’s iconic Chrysler building. Mrs. Chrysler actually preceded him in death, but her custom-built 1937 Imperial lives on.
Edit-I also found that 1932 number somewhere, but it’s wrong. Total all divisions was about 222,000, maybe 25,000 was just for “Chrysler” branded cars. Total sales exceeded a million in 1936. Lots more here: Walter P Chrysler – WPC Car Club
My grandfather was Production Manager for the Detroit plant of Bud Wheel for many years. My mom told about when the Great Depression hit that her dad had to lay off production staff until he was the only remaining person doing production planning for the Detroit plant. He would come home literally physically sick each time he had to lay off someone. And the day he was able to start gradually calling back staff he literally wept tears of relief for being able to re-employ laid off men.
No doubt that the Dodge Brothers were hard drinking and hard fisted guys. They also had a tumultuous relationship with Henry Ford.
The Dodge brothers had a successful auto parts company designing and building parts for other auto companies.
When Henry had designed the Model T, he could find no bank to loan him the money to build it because he had gone bankrupt with his first two auto companies.
They lent Henry the money to get started building the Model T, re-designed the fragile differential that Ford was going to use and spent 3 times what they had lent Ford for a plant to build parts for the Model T in exchange for 25% of Henry’s company. From 1908 to 1913 they built more parts and had more employees than Henry did.
Ford hated that the brothers owned a quarter of his company and her grew to hate them.
Ford paid his workers by the hour and Dodge paid them by the piece. They also gave them beer breaks while Ford raided his workers homes looking for alcohol. The Dodge brothers also had an infirmary in their plant open to the workers and their families.
In 1913 Ford opened the huge River Rouge plant and no longer needed Dodge parts but still had a contract with them so suddenly Ford claimed the Dodge parts no longer met specs.
Ford started a rumor that he was going bankrupt to drive down the price of his stock so Dodge would sell it but instead, the Dodge Brothers bought more of it and it cost Ford a bundle to buy them out.
Dodge set to work and designed their own car, a six cylinder that hit the market in 1914, saying “People will buy a Ford because they are cheap, but eventually they will want a proper car”.
Henry Ford would no onger do business with a redhead and never build a six cylinder car because of the Dodge Brothers.
I read a fascinating book about this and I wish I could remember the name of it.
I recall my father saying that the early Dodges had a shift pattern that was different from the shift pattern of other manufacturers, and that it confused some people.
The museum I volunteer for got a CV-8 similar to the one you posted but in black a few years ago.
The rear 3/4 view looks exactly like a '53 rear split window Beetle and most all the volunteers picked up on that.
But air doesn’t care what badge is on the car!
Smooth air flow is universal!
And Orville Wright helped with the aero development.
The car was one of the first in the US to eliminate the wood skeleton to support the body panles. It was all-steel. Still a body-on-frame but no more wood. Interior space was excellent. The straight 8 engine was rubber mounted and moved very far forward making front to rear weight distribution more even. Early cars were rear weight biased. The car still had solid axles front and rear because Chrysler ran out of development money to design an independent front suspension.
Well, it preceded the original VW by 4 years, so it is very possible that Ferdinand Porsche was inspired by its shape. Then again, Tatra sued him for copying their designs, and Porsche was willing to settle with them… until Hitler nixed the deal.
But, even before the Tatra design that Porsche allegedly copied, there was the design of Bela Berenyi, which preceded the original VW by 5 years:
