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Automakers Who Never Got a Bailout

Auto manufacturing in the United States is big business with a long history. Henry Ford‘s implementation of the assembly line as a manufacturing process revolutionized the way Americans built cars. Nearly 100 years later, two major automakers are begging for American taxpayer dollars to shore up business models that have crumbled in the face of the current economic downturn. Chrysler LLC, and General Motors have flown, driven, and begged their way to Washington in an effort to secure the funding needed to keep their company doors open. Here are a few of their stories:


Plymouth: Introduced in 1929, the Plymouth “Model U” marked the beginning of Chrysler Corporation’s foray into the low-priced vehicle market. 2001 Marked the last year Plymouth offered a vehicle for sale with a single model, the Neon. All other models retained from the Plymouth line were either rebadged and sold as Chryslers or discontinued. Instead of asking for a bailout, Chrysler accepted that Plymouth had died as a brand in the minds of the American consumer and stopped production completely. photo via wikipedia

As GM looks at its massive family of brands, it may want to consider repeating the same steps it took with Oldsmobile when it terminated the brand. Founded by Ransom Olds in 1897, Oldsmobile produced more than 400 cars in 1901, making it the first mass-produced high-volume auto manufacturer in America. Because of financial difficulties, Mr. Olds sold his company to General Motors in 1908. GM turned out to be both the life and death of Oldsmobile as a GM drove styling disasters and mechanical prowess into the brand that, in spite of critical design acclaim for smart styling in the 1990′s, foundered financially. In April of 2004, the last Oldsmobile ever produced rolled off the assembly line.

Haynes Automobile Company: Founded in 1898. Based in Kokomo, Indiana, Elwood Haynes claimed his “Pioneer” was the first American automobile. The Pioneer was quickly revealed to be quite late in a line of American cars but that does not lessen the triumph of his creation: A one-horsepowered, 1,000lb bicycle-tired car that never moved faster than 8mph. Haynes Auto Co. continued to manufacture cars until 1925 when hard times struck and bankruptcy quickly vanquished the company to the pages of history. Jobs were lost, capital investments gained no return, and there was no bailout.


Rauch and Lang: Incorporated in 1884 as a coach company, Rauch and Lang began a long history of financial upheavals and corporate evolutions. In a remarkable reversal of current events, the company made it’s name in automobiles by building the “Rauch and Lang Electric.” A gas powered electromagnetic-drive “Owen Magnetic” was released after another corporate restructuring only to drag the company into bankruptcy in 1921. While Chrysler and GM set their sights on producing an electric car to boost revenue, Rauch and Lang made just the opposite move and failed miserably.


Midget Motors Manufacturing Co: Founded in 1946 by Claud Dry and Dale Orcutt, the MMM co. manufactured the “King Midget”, a small kit car with one-wheel rear drive and a the flexibility to run on nearly any engine. My modern standards, the King Midget was a joke of a car and emissions and safety regulations forced the small company to stop production in 1970. The car was a success in that  it would take a person from point A to point B within an enclosed structure rolled about on four wheels. Instead of sending lobbyists to The Capitol to beg for handouts, Midget Motors quietly shut its doors. There was no cry for less regulation or an infusion of capital. Just an acknowledgement that the current business model was no longer feasible.


Auburn Automobile Company: Releasing its first model, a touring car, in 1904, the Auburn had an early start in blazing a path through innovation into failure. As financial woes continued to plague the company, a leveraged buyout soon saw Errett Cord take the helm. the “L-29” or “Cord” was the first American car with front wheel drive. Styled and engineered to critical acclaim, Errett Cord’s luxury autos were simply too expensive for the mid-depression American consumer. Production ended in 1937.

Studebaker: The Studebaker brothers built there name as the world’s largest manufacturer of horse-drawn wagons. When technology sought to replace the horses, the Studebakers responded by bringing an electric car to market by 1902. 64 years later, The Studebaker Corporation had merged with and vanquished the ailing Packard brand, moved from building wooden wagons to sleek gas-powered cars, and driven itself into financial ruin. A 1966 Studebaker Cruiser rolled off the production line in Ontario, Canada, as the last car ever built by the boys who began it all by building wheelbarrows for gold miners.


Scripps-Booth: Famous Production Model: The “Rocket” cyclecar, and the “Bi-Autogo” The Rocket quickly failed as it lasted only as long as the motor-powered-bicycle-car fad lasted. The Bi-Autogo, a Detroit product, was the proud bearer of Detroit’s first V8 engine. Like the Rocket, the Bi-Autogo was novel with it’s massive motorcycle-like construction of car on two 36″ wooden wheels with retractable low-speed wheels on the side. But innovation and novelty seem to come up empty handed when they are the only reasons for a consumer to buy a car.


Bricklin Automotive: Famous for bringing Subaru to America, Malcolm Bricklin’s mantra, “the more education you have, the harder it is to do unusual things,” has led him into many unusual-if-unsuccessful projects. After leaving Subaru, Bricklin’s concept of a perfect car, the SV-1 (Safety Vehicle 1) was released upon the world by Bricklin Automotive. Fewer than 3,000  of the SV-1′s were produced before Bricklin Automotive was forced to close its doors.

Quantdt Group: Famous Production Model: The “Amphicar.” Designed by Hans Trippel as the German “Schwimmwagen.” Production of the vehicle often quoted as being “Not a very good car and not a very good boat either” began in 1961. Powered by a 43hp engine, the Amphicar was reported to reach speeds of 7mph in water and 70mph on land. In a time obsessed with cross-functionality, the Amphicar took the concept of flexible transportation to a new level. Due to poor performance on land and water, the Amphicar sold only as a hobby car and sales soon proved insufficient to keep the company afloat.

Crosley Motors Inc: Based in Marion, Indiana. Famous Production Model: The $849, .75l The Crosley “HotShot,” the first post-War sports car. Many argue that GM and Chrysler’s downfall is due to low production of fuel-efficient vehicles.The Radio manufacturer-turned-automaker Crosley grew in popularity during WWII because it sold 50mpg cars, but even fuel efficiency was not enough to maintain sales and produce growth. Production ended on July 3rd, 1952.

Modern automakers build more complex cars than ever before. This means more machines and tools are needed which are only secured through massive infusions of capital. In short, building cars is very, very expensive. This has caused many automakers to set up “deals” through which different factories will build part or all of a vehicle that will be sold by different automakers under different brands in a practice known as “rebadging.” The Dodge “Colt” is an example of rebadging as it was manufactured by Mitsubishi and simultaneously sold as the Mitsubishi “Galant.”

Rebadging is an example of the sort of business relationships that save money for automakers in the short term. In the long term,  however, production and marketing entanglement with many firms during an economic downturn can spell disaster for an automaker trying to survive. Being so big that a government would rather give you money than see you fail was never a goal of many automakers.

Is there an automaker you’d prefer to see gone, or perhaps one you’d especially like to see making a comeback?

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