When Olds Was Young

Venture capital and good salesmanship induced R.E. Olds to move his fledgling car company to Detroit, where he set the die for Ford, Buick, and Chevrolet.

When delivering one of his Oldsmobiles to new owner Henry Leland in 1901, Ransom Eli Olds struggled to demonstrate the virtues of the vehicle for the Leland family. The engine refused to restart, and Olds admitted that each car had “an individuality of its own.” Leland, whose Leland & Faulconer precision machine shop would soon land a contract for producing 2,000 Olds engines, tore apart the car’s power plant to learn how to eliminate the “individuality.” 

The great mechanics of Detroit had been tinkering with motor vehicles since 1896, when Charles Brady King and Henry Ford tested theirs around town. But for Detroit to become an automobile manufacturing center, Olds had to be lured from Lansing, where he successfully made small gas engines for generators and marine applications. He went on to experiment with electric-, steam-, and gas-powered cars, all of which he eventually produced. 

Because of his track record, Olds drew solid financial backing. First courted by an eastern syndicate’s tentative proposal, he picked out a factory site in Newark, N.J. As George S. May explains in A Most Unique Machine: The Michigan Origins of the American Automobile Industry, nothing came of it. Definitive support was given on May 9, 1899, when the “kindly and courteous” copper king Samuel Latta Smith of Detroit, and his two sons, put in $200,000 to form Olds Motor Works. 

With the paperwork under way, Walter Campbell of the Merchants and Manufacturers Association and Edward Stimson, a commercial real estate broker, talked location to Olds. A week after incorporation, the company bought nearly 5 acres along Jefferson Avenue, between the Detroit Stove Works and the Belle Isle Bridge (then a wooden crossing). May writes that “the advantages that a city of Detroit’s size offered in terms of skilled labor, suppliers, and shipping facilities were certainly the important considerations.” The construction of a manufacturing complex began immediately, and the plant opened at the turn of the 20th century. 

Olds had some 100 employees by the next summer, but no car. “What we want to build is a small, low-down runabout that will have a shop cost around $300 and will sell for $650,” the founder told engineer Horace Loomis. 

By the fall, the Oldsmobile Model R, the first of three models to be known as the Curved-Dash Olds, was ready. Its single-cylinder engine produced 7 horsepower, the piston moving at “one chug per telephone pole.” 

Then disaster struck the factory. On March 9, 1901, an explosion and fire caused what The Detroit News called “a spectacle of rare magnificence.” Some workers jumped from the third floor, a prototype electric car dropped through the ceiling into an office below, and overall damage came in at $72,000. Only the foundry building remained unscathed, and one Curved Dash runabout was saved from the blaze. 

Nevertheless, Olds had 334 orders in hand. Suppliers like Leland, the Dodge Brothers, and Weston-Mott pitched in to resurrect the business. Benjamin Briscoe, who helped start Buick Motor Co. and went on to found United States Motor Co., which later was reorganized as Chrysler Corp., said the moment “marked the beginning in a real way of the automobile manufacturing business in the city of Detroit.” Somehow, Olds turned out 425 runabouts in 1901. Test driver Roy Chapin amazed the world by taking only seven and a half days to deliver one from Detroit to New York, where R.E. Olds awaited him at the Waldorf-Astoria Hotel. 

By summer’s end, Olds decided to move the operation back to Lansing. In 1904, the company built more than 5,500 runabouts, but R.E. Olds fell out with the Smiths and launched REO Motor Car Co. Meantime, Leland had become Cadillac’s guiding force, famed architect Albert Kahn completed the Packard factory, and Ford Motor Co. was established. The combination of available capital gained from 19th century timber and mining pursuits across Michigan, along with the unusual concentration of skilled labor and native genius, had set Detroit on its way to becoming the Motor City. db