Jan 23 2012

Walter P. Chrysler,  the American Locomotive Company and a 1932 Newsreel

American Locomotive Company played a brief but important role in the career of a great American automobile executive Walter P. Chrysler. In December 1909, Chrysler's first manufacturing job was superintendent of the Pittsburgh Works plant of the American Locomotive Company.

As described in this chryslerclub.org profile, Chrysler was recruited from the railroad industry in January 1912 by an Alco director James Storrow to work for Buick:

A Brief Look at Walter P. Chrysler 

  By Mike Petersen

From chryslerclub.org

This article was featured in the November, 1986 issue of WPC News   

Chrysler,  the last independent car manufacturer  to enter the automotive industry. Most of us see the name everyday, but few know much about the man. We can still hear him speak to us from the pages of his autobiography "Life of an American Workman." In the book "Birth of a Giant," by Richard Crabb, all of the personalities and the events of the early automobile days are tied together.  These two books are highly recommended reading as a means of understanding where the industry came from and to reflect on where it may be going.

Chrysler was the third of four children. He was born in Wamego, Kansas in 1875 ( raised in Ellis, Kansas ) and recalled later in life the Indian scare of 1880 and the six shooter that his father, a locomotive engineer, carried.   "Scientific American" was Chrysler's favorite magazine.

His first job as a janitor brought him 10 cents an hour.   In 1893 he took a cut in pay to 5 cents an hour in order to enter a four year machinist apprentice program.   By the second year he was earning 10 cents an hour, then 12.5 cents in the third year, and finally 15 cents an hour in the fourth year.  During this time he studied air brakes before the Union Pacific Railroad installed them, and he studied steam heat that was replacing the coal stoves in passenger cars.

In 1897 Chrysler moved to Wellington, Kansas to work for Santa Fe Railroads and to learn new  things.  After two weeks he was at the top of the pay scale -- 27.5 cents an hour. So he went back to Ellis, Kansas for 30 cents an hour and then on to Denver, Colorado where a job at Colorado & Southern lasted two weeks.  From there he hopped freights and moved around looking for work in places like Cheyenne, Wyoming.

In 1900, Chrysler was back to 30 cents an hour in Salt Lake City, Utah working for the Denver and Rio Grande Western. He had saved $60 and took the big plunge -- marrying Della Forker from Ellis, Kansas. At this time Chrysler took  an electrical engineering correspondence course.

Chrysler was earning $90 a month as a foreman over 90 men in  1902.    He took more correspondence courses and moved on to the Colorado and Southern Railroad in Trinidad, Colorado for $105 a month as general foreman.  In 21 months he became a master mechanic; only 29 years old, yet the boss of 1000 men and earning $140 a month. He was then transferred  to Childress, Texas to build a new shop with a raise in pay to $160 a month. At the completion of that assignment Chrysler went to Chicago Great Western in Oelwein, Iowa at $200 a month and had a life savings of $500.

In 15 months Chrysler moved up to general master mechanic and just 3 months later to superintendent of motive power for $350 a month.  A keen interest in automobiles started at the Chicago Automobile Show in 1908.  The Locomobile touring car was on display and could be purchased for a mere $5,000. Chrysler put up $700, all of his savings, and borrowed $4,300 in a loan arranged by Ralph Van Vechten and co-signed by Bill Causey.   Chrysler took the Locomobile apart as soon as he got it home and studied it.   He did not drive it for three months; however, on the first outing in the car, indeed the first time behind the wheel of any car, Walter P. Chrysler ran into the neighbor's ditch and garden.

At 34 years of age he was in charge of thousands of men and millions of dollars worth of equipment, at $350 a month. Chrysler took more correspondence courses in engineering and after an unpleasant meeting with the new president, Chrysler took a cut in pay to $275 a month in order to work for American Locomotive Company as a foreman in the Allegheny shop in Pittsburgh.   Here he bought another car -- a Stearns-Duryea 6 cylinder.

Chrysler was promoted to works manager at the age of 36.    James Storrow, director of American Locomotive Company, got Chrysler together with Charles Nash, who was then president of General Motors. Chrysler was earning $12,000 a year but accepted a job as works manager at Buick for $6,000 a year. He was finally in the automobile business.    In his first week at Buick he reportedly earned his first year's pay.    It seems there were no records on cars released for test drives and Buick was "losing" one to four  cars per day.  This was brought under control rather quickly.   A piece-work schedule was established at Buick.  Elimination of a chassis gloss coat cut the time per chassis of 4 days to 2 days and production increased from 45 a day to 75 a day. An assembly line was started along with spray paint and the idea of painting before assembly -- production rose to 200 a day. Other changes essentially involved the substitution of metallurgy for cabinet making. After three years and no raise, Chrysler asked for $25,000 a year.

In that year, 1915, Billy Durant returned to gain control of GM for the second time.  Chrysler was general manager of Buick in 1916 when Durant offered him the presidency of Buick. Chrysler accepted (he also backed out of the formation of Nash Motors Company) and received $120,000 a year and $380,000 a year in GM stock at the price of the stock on the day of the contract.   During these years at Buick, Chrysler became acquainted with K.T. Keller, a young master mechanic.

Chrysler quit GM in 1920 as the president of Buick and the vice-president of GM in charge of operations. This action came about when Durant announced at a civic meeting that GM would build a new plant in Flint, Michigan to manufacture Buick frames. Chrysler had arranged with A.O. Smith to build the 1921 Buick frames, so this surprise announcement resulted in Chrysler's resignation.  

At forty-five years of age Chrysler was retired and puttering about his Detroit office.  Willys-Overland was $50 million in debt and back into the picture comes Ralph Van Vechten who earlier arranged Chrysler's $4,300 car loan.  Chrysler was asked to come into Willys and save the banker's $50 million but the risk of not pulling this off was so great that Chyrsler asked for 2 years at $1 million per year.  He was concerned that failure to save Willys would reflect on his abilities.  In two years the debt was reduced to $18 million. 

During those two years Chrysler brought in Fred Zeder, Owen Skelton, and Carl Breer to an engineering center in Elizabeth, New Jersey.  These men (all of whom were at Studebaker the year before) worked on a new car and a new  engine.   Failure to interest Willys executives in a new engine lead to the break with Willys at the end of two years.   At this time Maxwell Motors was $26 million in debt and Chrysler was asked to help out, and he did at a salary of $100,000 a year and a stock option. He secured a loan of $15 million for Maxwell and sold cars out of existing inventory for $995 -- a profit of $5 per car.   Chrysler went after the New Jersey engineering center for $5 million, but Durant outbid him at $5,525,000. The work done on the new car was turned over to Durant in the deal, and thus the Flint car came into existence. Zeder, Skelton, and Breer were moved to the Chalmers plant in Detroit as part of Maxwell to continue work on the new engine.

At this point, Studebaker made an unsuccessful attempt to buy Maxwell and the new high compression engine. This engine, and a new car, required $5 million to get into production in 1923, money that Maxwell did not have. The 1924 New York Auto Show was an excellent place to display the new car and secure a loan, but since the car was not in production it could not be displayed at the show (Ed. Note: recent evidence uncovered at the Detroit Public Library shows that Chrysler had a display at the NY Auto Show. All the attention, however, at the coup of providing a display at the Commodore has led many astray -- even the story In Chryler's own book). Chrysler rented the lobby of the Hotel Commodore, the show's headquarters and a place where men in the industry stayed during the show, and displayed the new Chrysler.

Financing was secured from Ed Tinker of the Chase Securities Corporation and 32, 000 Chryslers were built in 1924 and sold for $1595 — the same as Buick.  This car was a true 70 mph performer with four wheel hydraulic brakes and a replaceable oil filter.   On $5 million debt the company had a net profit of $4,115,000!

In 1925, MaxwelI Motor Corporation was re-organized into the Chrysler Corporation and Chrysler bought the banker's stock at $16.   In 1926, K.T. Keller, from the Buick days, came on board as general manager and become president a few years later. Also that year the Chrysler 50 replaced the Maxwell and competed with Dodge. The model numbers indicated top speeds - 50, 60, 70 and 80 mph -- and later models used 62 and 72 designations to indicate improved models.

Chrysler was in fifth place in 1927 with sales of 192,000 cars.   $75 million was needed to build a foundry, forge, and new facilities;  Chrysler became acquainted with Clarence DiIIon, of Dillon, Reed and Company, who had brought Dodge in 1924 for $146 million. 

In May, 1927, Chrysler and Dillon negotiated for 5 days straight in a suite at the Ritz-Carlton Hotel and at 5 p.m. on the fifth day, the deal was struck -- Dodge was sold for $225,000,000 (comprised of $170,000,000 in Chrysler stock and $55,000,000 in Dodge liabilities). Chrysler had canvas signs made up in advance that were installed that evening at the Dodge Main -- they simply read "Chrysler Corporation - Dodge Division".   Chrysler's capacity was increased five fold!

K.T. Keller became Dodge president in 1929 and by 1937 Chrysler was free of debts. There were 76,000 employees. 

Chrysler died on August 18, 1940 and was not there to witness the fine contribution Chrysler Corporation made to the war effort. This effort was perhaps the most fitting tribute to the man and to the company that could get things done. In May of 1940, Keller was asked to build tanks and from a set of blueprints and a cornfield, tanks were rumbling out the door of a new plant in just seven months! Really remarkable.   

In this two-minute 1932 newsreel, Walter P. Chrysler, Fred Zeder (Head of Chrysler Engineering) and K.T. Keller (President of Dodge) discuss the new Dodge Brothers car. Check out Zeder's response to Walter Chrysler's question; "Fred,  are you proud of this car?" at 1:32:




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