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The Fly Buys The Mammoth: Chrysler and Dodge Brothers

by Mike Sealey

History does not tell us about Walter P. Chrysler’s abilities as a poker player, but his approach to Dodge Brothers suggests he may well have been quite good.

The rise of Dodge Brothers

Dodge Brothers had started as a machine shop; they made engines for the first mass-produced Oldsmobiles, and did most of the assembly of the earliest Fords under contract, before building the cars bearing their own names in 1914.

Dodge’s first dealer, Cumberland Motors of Nashville, Tennessee, remained in business until the late 1960s, proudly advertising their status as “World’s First Dodge Dealer.” There was no shortage of applicants, though, to sell Dodge Brothers cars.

Dodge Brothers did not have a truck line for some time; their first was a purpose-built ambulance for US forces in World War I, which became a factory-built pickup in 1918.

John Bittence, Editor of the Dodge Brothers Club News, wrote that Frederick Haynes learned state-of-the-art casting and mold making at Cornell University, and went from Franklin to Dodge Brothers in the machine-shop era, bringing Franklin engineer Russell Huff over when they started on the car.

Both brothers died in 1920 - John in January, Horace in December. The Dodge widows promoted Frederick J. Haynes to run the company; he proved to be a good choice.

Just one year later, Dodge Brothers entered a joint venture to produce Graham Brothers trucks using Dodge Bros. mechanicals, selling them at Dodge Bros. dealers.

After the Dodge brothers

In 1925, the widows sold the company to investment bankers Dillon, Reed & Co. for $146 million, an astronomical sum in that era — a new Ford sold for less than $300. In 2015, that would be roughly $2 billion.

Dillon, Reed likely bought Dodge Brothers to sell it, but Dodge Brothers not only continued to run at a profit afterwards, but bought Graham Brothers in 1926 (the Grahams went on to buy Paige-Detroit, renaming it Graham-Paige, and then selling it to Kaiser-Frazer). The purchase allowed all truck manufacturing to be consolidated under the Dodge Brothers name.

After building parts for other manufacturers, Dodge became a colossus, especially as most automakers bought a much higher percentage of components from outside suppliers. Dodge had an enormous plant complex in Hamtramck, Michigan (known as “Dodge Main” until it was torn down in 1980), with its own foundry, hospital, and even its own telephone exchange.

Dillon, Reed had a pretty good idea of what it had, and had no intention of letting it go cheaply.

Walter Chrysler enters the picture

Chrysler Corporation, still not much larger than Maxwell Motors, which it essentially had been, was a fly on the wall by comparison. Walter Chrysler needed Dodge’s foundry and production capacity if he was ever going to come close to General Motors and Ford.

Unlike GM, which acquired more than thirty different car, truck and tractor manufacturers before settling down with the six core car divisions, or Ford, which seems to have acquired Lincoln as much for Henry I to punish Henry and Wilfred Leland as anything else, Chrysler needed Dodge, and Walter Chrysler never acquired any other existing makes. Indeed, he had killed Chalmers not long after his Chrysler car was launched, and the new Plymouth brand was essentially a continuation of the “Good Maxwell” Four — he killed off the Maxwell name at the end of 1926.

Walter Chrysler’s scheme for getting Dodge was quite possibly his most audacious act since buying his first car (a Locomobile) that he could hardly afford.

Companion makes were in the news at the time, including Hudson’s Essex, Willys-Overland’s Whippet, Cadillac’s LaSalle, and Oakland’s Pontiac, which outlived its parent by around seven decades. Buick had the lower-priced Marquette in the wings, and Oldsmobile was preparing the Viking, which was actually higher priced than its parent car. Most of the GM companions were aimed right at Dodge’s segment of the market, which had to have made Dillon, Reed somewhat less than comfortable.

Into this fray stepped Walter Chrysler, with three new brands — though, admittedly, one simply replaced Maxwell. This was Plymouth, which was hardly in Dodge Brothers’ turf.

Dillon, Reed was likely far more unnerved by the other two introductions; a new lightweight six-cylinder car, the DeSoto, which sold right below Dodge Brothers in price, and Fargo trucks, aimed at the Dodge Brothers truck line.

In his excellent biography of Walter P. Chrysler, Vincent Curcio wrote that DeSoto and Fargo were created mainly to intimidate Dillon, Reed into selling Dodge Brothers — and it worked. They sold out in 1928 for $170 million (in 2015 dollars, $2.4 billion), short of their asking price but still at a large profit — not even counting the profits made by Dodge Brothers in their three years of ownership.

Walter Chrysler bet the entire company on his ability to buy Dodge Brothers; in later years, he was quoted as saying, “without Dodge, there would be no Plymouth car.”

The company would not have been able to expand production as they later did without Dodge’s capacity (not just to assemble cars, but to make parts), not to mention the later sale of Plymouths by Dodge dealers — though Plymouth, DeSoto, and Fargo production were all well under way when the Dodge sale took place.

It’s unsettling to imagine how the two firms would have weathered the Depression had they remained separate, with Chrysler’s multiple makes and low production capacity, and Dodge Brothers’ ownership by an investment firm. Car companies boomed and went bust quickly in those days.

Mr. Curcio wrote that Chrysler had intended to drop DeSoto and Fargo after getting Dodge. With Fargo, this wasn’t difficult, since the Fargo line was sold by Chrysler-Plymouth dealers.

Allpar test drives a 1922 Dodge Brothers car

DeSoto, on the other hand, was sold through a network of three thousand sole-brand dealers, who would have had grounds for legal action had Chrysler dropped the make; and it was headed by Chrysler son-in-law Byron Foy. In any event, DeSoto took the first year sales record for a new make, lasted an amazing 32 years longer in the United States, and continues to this day in Turkey.

See: the Dodge Brothers (and Henry Ford)

Dodge Brothers through the years and other related bits and pieces

Chrysler Heritage • History by Year • Chrysler People and Bios • Corporate Facts and History