Michigan and the Motor City: A Manufacturing History
Throughout all the ups and downs of the auto industry, Michigan is still known by many across the nation for its manufacturing history.
There are many reasons why Michigan became the hub of all automotive manufacturing, but a few just happen to be mostly chance. For one thing, Michigan had access to many of the natural resources required to build an automobile, including iron ore and timber (Unlike modern cars, early car frames were made from wood). Readily accessible water and rail routes also made shipping cars to major metropolis areas like New York and Chicago easier.
But besides resources and conveniences, Michigan happened to be home for two men who largely shaped the industry: Henry Ford and Ransom E. Olds.
Originally born in what is now known as Dearborn, Michigan, Ford showed that he was interested in engineering and mechanics at an early age, taking apart watches and learning how steam engines worked. In 1891, he and his wife moved to Detroit after Ford had decided to take a job as an engineer at the Edison Electric Illuminating Company. While Ford did not actually invent the automobile, his time at Edison Electric gave him the opportunity to explore inventions and learn from other engineers. The rest, as they say, is history.
One thing Ford did that separated him from his competitors bringing a new way of thinking to manufacturing. He wanted to create an automobile that was inexpensive to build and affordable for the masses. So, first, he introduced the idea of a moving assembly line. This drastically reduced production time and the price of the Ford Model T. He also created the “Five-Dollar Day,” announcing that he would double every eligible worker’s salary to the amount of $5 and reduce the working day from nine hours to eight. This skyrocketed employee morale and created mass-company loyalty and productivity. This kind of thinking helped Ford Motor Company stay at the forefront of the industry for many years, hurtling them into what would become known as “The Big Three” of automotive manufacturers: Ford, Chrysler-Fiat Automobiles and General Motors.
The other famous Michigander responsible for shaping the automobile industry was Olds, founder of Olds Motor Works which was eventually sold to become part of General Motors, as well as Lansing’s own REO Motor Company. Olds often dabbled in areas of business besides automobile manufacturing, specifically inventing; he is credited with creating the first stationary assembly line (Henry Ford introduced the moving assembly line) and the first gas powered lawn mower. Above all, he was renowned for his willingness to share information and teach others who were up and coming in the industry. That shared knowledge inadvertently led to the company we know today as General Motors.
General Motors, more commonly referred to as “GM” in most of Michigan was founded by William Durant, Charles Stewart Mott and Frederic L. Smith. Durant was the first manufacturing pioneer to suggest the idea of a multi-brand holding company that would create all various kinds of cars, not just one. This was how GM began as a holding company, which was focused on the Buick brand. To do this, Durant proceeded to buy out many smaller automobile companies like Cadillac, Oldsmobile and Oakland, to name a few. This worked but was also terribly expensive, as GM was a small company at the time and did not have the deep pockets required to continue this sort of financial plan. Durant was forced out by his financial backers at the time and moved on to launch Chevrolet – a GM-owned brand today.
Durant would eventually come back to GM after Chevrolet and wanted to expand into assorted brands. Walter Chrysler worked as president of Buick when Durant was looking to return to expanding GM’s brands and production. Chrysler did not agree with Durant’s vision for the company and ended up leaving – going on to create the Chrysler Corporation, which is known today as Chrysler-Fiat Automobiles.
The Chrysler Corporation began in 1925 and would quickly expand in the next few years. Chrysler used the strategy that Durant had perfected at GM and started acquiring brands under the Chrysler name, including Fargo Trucks and Dodge Brothers. Eventually, they would acquire Jeep as well as several other profitable brands.
The Big Three are as defining as the shape of the state itself; they are what Michigan is often most known for and to this day employ thousands of people. While the auto industry has most definitely seen serious highs and lows, it cannot be denied that the automobile is embedded in Michigan’s history.
Important Moments in Car Manufacturing History:
1896 – Henry Ford is spotted on the streets of Detroit test driving his first automobile, the Quadricycle.
1897 – Ransom E. Olds founds the Olds Motor Vehicle Company.
1898 – Henry Ford founds the Detroit Automobile Company, his first endeavor as a car manufacturer. The company produces only a few automobiles before closing three years later.
1899 – Ransom E. Olds opens the first auto manufacturing plant in Detroit.
1901 – Ford founds Henry Ford Co.
1902 – Ford decides to leave Henry Ford Co. after a dispute among financial backers; the company then reorganized, and becomes known as Cadillac.
1903 – Ford founds Ford Motor Company with 12 investors, including two brothers: Horace and John Dodge.
1905 – Olds founds the REO Motor Car Company.
1908 – Charles Stewart Mott and William Durant found General Motors in Flint, Michigan. Originally, GM was started as a holding company for their other endeavor, called Buick.
1908 – Ford rolls out the Model T.
1911 – William Durant and the Louis Chevrolet found Chevrolet.
1913 – Ford creates the modern-day assembly line, introducing speed and efficiency to manufacturing.
1925 – The Chrysler Corporation is founded by Walter Chrysler.
2008 – President Bush grants a $17.4 billion bailout to Chrysler and GM.
2009 – Two out of the big three, Chrysler and GM, file bankruptcy; the Obama administration provides financial assistance and infrastructure to guide the companies through bankruptcy.