Dodge Motors – The Chrysler Era

When Walter P. Chrysler bought Dodge in 1928, he rescued a failing business which was barely meeting its payrolls. Dillon, Read & Company were unfamiliar with the automobile industry and as absentee owners were not able to keep the firm operating efficiently. In 1925, the banking firm also acquired Graham Brothers, a large truck maker, and the three Graham brothers became large Dodge stockholders. During the Dillon, Read era, Raymond Graham served as Dodge general manager, while Edward J. Wllmer, a Wisconsin utility executive, was president of Dodge.

The bankers-turned-automakers made a major marketing mistake during their brief reign. The Dodge car had been a sales success because it had a reputation for quality and durability, but was priced only about $100 above the Model T. When the explorer Roy Chapman Andrews headed the American Museum of Natural History’s Central Asiatic Expeditions in 1924-28, traveling thousands of miles over terrain where even camels feared to tread, he insisted on using Dodges exclusively and widely publicized their toughness. Dillon, Read decided to make Dodge a luxury line with appropriate prices. In 1928, when Ford’s Model A sold for $495, the lowest-price Dodge had a price tag of $895, while the more expensive versions sold for nearly $2,000. The resulting sales decline made Dillon, Read susceptible to Walter P. Chrysler’s overtures.

Chrysler was bom in Wamego, Kansas in 1875 and at age seventeen trained as a machinist. He worked for several midwestern railroads and in 1908 became the superintendent of motive power for the Chicago Great Western Railway. In 1910 he took a job with the American Locomotive Company and soon became manager of its Pittsburg manufacturing plant. Chrysler’s career in the automobile industry began in 1911 when he became works manager for the Buick Motor Car Company in Flint, Michigan at a salary of $6,000 per year. He took over their manufacturing operations and within five years was president and general manager of Buick, earning over $500,000 a year. Chrysler left Buick in 1919 after disagreements with General Motors’ president William C. Durant, Following a brief retirement, Chrysler successfully reorganized the Willys-Overland Company and then did the same for the failing Maxwell Motor Car Company. In 1924, he introduced the Chrysler automobile, featuring the industry’s first high compression engine. Production jumped from 80,000 cars in 1924 to 137,000 in 1925, when he established the Chrysler Corporation and absorbed the assets and stock of Maxwell.

Walter Chrysler’s purchase of Dodge, described by one observer as “the minnow swallowing the whale,” was a key element in his plan to challenge General Motors and Ford. He introduced the low-priced Plymouth and the DeSoto in 1928, so with the addition of Dodge, Chrysler had four major car lines and instantly became the third largest automaker.

Dillon, Read & Company sold the Dodge property to the Chrysler Corporation on May 29, 1928 and on the following day, the new management team headed by K.T. Keller moved into the Dodge offices. Keller, the Buick master mechanic under Chrysler, rejoined him in 1926 as vice president in charge of manufacturing. Keller became a Chrysler director in 1927, president of the Dodge Division in 1929, and succeeded Chrysler as corporation president in 1935, He was so effective in streamlining production at Dodge Main that he freed up enough floorspace in his first three months to house the DeSoto Division, Dodge was the largest division within the Chrysler Corporation and produced many of the top executives. L,L. Colbert, named vice president at Dodge in 1935 and president ten years later, succeeded Keller as Chrysler Corporation president in 1950.