BUSINESS: The Ultimate Resource

October 2004 Upgrade 25

MANAGEMENT GIANT
Walter Percy Chrysler
Timeline
1875 1905 1908 1911 19161919 1920 Born. Attends the Chicago Auto Show. William Crapo Durant founds General Motors. Employed as works manager at Buick, part of General Motors. To prevent him leaving, Durant ups his salary from $50,000 to $500,000. Leaves GM and retires. Rescues Willys-Overland, then Maxwell-Chalmers, and builds the 19211923 Chrysler Six. Chrysler Six car shown during New York Auto show. Chrysler Six goes 1924 into production. Maxwell Motors becomes the Chrysler Corporation. Chrysler is president 1925 and chairman. Company turns in a profit of $17 million. Chrysler Corporation buys Dodge Brothers dealership network. 1928 Renamed Chrysler Motors. The 1,048ft Chrysler building constructed in midtown Manhattan. 1940 Dies.

Summary
Walter Chrysler (18751940) was the founder of one of the largest U.S. automobile corporations of the 20th century, the eponymous Chrysler Motors. Even as a teenager Chrysler demonstrated a natural ability for engineering. His formidable engineering talents were later matched by his organizational and management skills. From Buick and General Motors in 1908 to the Chrysler Corporation in 1925, via Willys-Overland and Maxwell-Chalmers, Chrysler proved to be something of an automobile company doctor transforming ailing firms into healthy ones. By his death in 1940 he had put Chrysler firmly alongside Ford and General Motors as one of the big three U.S. automobile companies.

Background and Rise

Shortly after Chrysler was born, his family moved from Wamego, Kansas, to Ellis, Kansas, where his father worked as an engineer for the Kansas Pacific Railroad. Chrysler attended the local school in Ellis, but also spent a great deal of time with his father in the engineering workshops of the Kansas Pacific Railroad where he developed a fascination with engineering.

Bloomsbury Publishing Plc 2004

BUSINESS: The Ultimate Resource

October 2004 Upgrade 25

Upon leaving school he became an engineer with the Union Pacific Railroad (previously the Kansas Pacific Railroad) and by the age of 18 had already designed and built a miniature steam engine that ran on a homemade track. When, aged 22, Chrysler finished his apprenticeship, he set out across the United States looking for work. He moved from job to job, working for the Rio Grande & Western Railroad, the Colorado & Southern Railroad, and the Chicago & Great Western Railroad, all the while enhancing his reputation as a skilled engineer. It was in Oelwein, Iowa, while working as the Superintendent of Motive Power for the Chicago & Great Western Railroad, that Chrysler first saw the contraption that would change his life. Walking the streets of Oelwein one day, he came across several horseless carriages. Curiosity aroused, he made a point of attending the 1905 Chicago Auto Show.

Defining Moments
At the Auto Show Chrysler was entranced by a Locomobile Phaeton, with its red leather upholstery and white bodywork. Putting $700 down and financing the balance, Chrysler bought the car, had it shipped home, and then proceeded to take it to piecesnot once but several times. By the time Chrysler had finished dismantling and reassembling his new car he had a perfect understanding of how it was engineered. His next career move took him to Pittsburgh, Pennsylvania, as works manager for the American Locomotive Company. It was an executive there who tipped him off about a job at the Buick automobile company. Chrysler met Buicks president, Charles W. Nash, and was taken on as works manager. It was 1911Chrysler had entered the automobile industry. The Buick plant in Flint, Michigan was the cornerstone of William Crapo Durants General Motors, founded in 1908. Durant was ousted as president of GM in 1910, but staged a comeback, regaining the presidency in 1916 and firing Charles W. Nash. As Durants fortunes rose so too did Chryslers. Chrysler began by sorting out production at the Buick plant. Before long he was president and general manager of Buick. When Durant got wind of a rumor that Chrysler was planning to take over another Auto Company, Packard Motors, Durant made Chrysler an offer he couldnt refuse. He increased his salary from $50,000 a year to an astonishing $500,000. Chryslers meteoric ascent continued. As General Motors vice-president in charge of production and then executive vice-president, Chrysler worked alongside Durant. But Chrysler wasnt impressed with Durants handling of the company. Predicting disaster, he left GM in 1920. Shortly after, Durant was forced out by GMs financiers over the companys $80 million debt. Chrysler, however, had restored the good name of Buick and increased production from 40 to over 500 cars a day. In 1920, aged 45 and financially secure, he put away his desk diary and retired. It was a brief retirement. He was approached by a group of bankers and asked to rescue the ailing Willys-Overland company. He would have a two-year contract, the position of executive vice-president, and a free hand. Chrysler asked for one extra thingan annual salary of $1 million. The desperate bankers agreed; Chrysler set about saving the company.

Bloomsbury Publishing Plc 2004

BUSINESS: The Ultimate Resource

October 2004 Upgrade 25

His strategy was to build a brand new carnew design, new engineeringto revive W-Os fortunes. He assembled a team of automotive experts that included the independent engineering team of Carl Breer, Owen Skelton, and Fred Zeder. Work was well advanced on the new car when the bankers got cold feet and withdrew their support. Chrysler, however, motored on, forming the Chrysler Corporation as a separate entity within W-O and retaining the original design team at the production facility in Elizabeth, New Jersey. The new car was christened the Chrysler Six. Before long Chrysler was on the move again when bankers called him in to save yet another automobile company in troubleMaxwell-Chalmers. Chrysler negotiated with W-O to be allowed to work with Maxwell and took a $100,000 salary and stock options. When his two-year contract was up at W-O, Chrysler left for MaxwellChalmers. When he arrived, Maxwell-Chalmers was in a mess. After some wheeling and dealing Chrysler merged Maxwell and Chalmers. Then, at the helm of the new Maxwell Motors, Chrysler refocused his attention on the Chrysler Six. He brought the Chrysler Six engineering team to Maxwell, and in 1923 the new car appeared in prototype. With its fast top speed, high-compression engine, and hydraulic brakes, the Chrysler Six was truly revolutionary. For once Chrysler struggled to raise the finance to put the car into production. Bankers were reluctant to bankroll an unproven and experimental product. Undaunted, Chrysler took the car to the 1924 New York Auto show. On discovering that, as a prototype, the car was ineligible for the show, he displayed it in the foyer of the Hotel Commodorethe shows headquarterscreating enough interest to persuade financiers Chase Securities to put up production money. The Chrysler Six was in production in the same year. In that year alone 32,000 were sold. Maxwell Motors was restructured in 1925, emerging as the Chrysler Corporation with Chrysler as president and chairman of the board. In 1925 the company turned in a profit of $17 million. New models rolled off the Chrysler production line. In 1928 Chrysler Corporation bought Dodge Brothers with its extensive dealership network and changed its name to Chrysler Motors. With Chrysler in command, the company flourished, survived the Great Depression, and outlasted many competitors by a combination of astute management and innovative products. Chrysler remained president until 1935 and chairman until his death in 1940.

Context and Conclusions

The list of recipients of Time magazines Man of the Year award is dominated by politicians and statesmen, with a few notable exceptions. One of those exceptions is the Time magazine Man of the Year in 1928Walter Chrysler. Alongside Henry Ford and William Crapo Durant, Chrysler was one of the greatest automobile industrialists of the first half of the 20th century. Of the three men, Chrysler arguably represented the most complete combination of technical, entrepreneurial, and managerial ability. Few men have taken on such demanding corporate challenges so frequently. It was no coincidence that, whenever an automobile company was ailing, the man the bankers called in to save it was Chrysler.

Bloomsbury Publishing Plc 2004

BUSINESS: The Ultimate Resource

October 2004 Upgrade 25

The Best Sources of Help

Books: Chrysler, Walter P., with Boyden Sparkes. Life of an American Workman. New York: Dodd, Mead & Co, 1950. Breer, Carl, ed. Anthony J. Yanik. The Birth of the Chrysler Corporation and its Engineering Legacy. Warrendale, Pennsylvania: Society of Automotive Engineers, 1995. Curcio, Vincent. Chrysler: The Life and Times of an Automotive Genius. Oxford: Oxford University Press, 2001. Web site: Chrysler: www.chrysler.com

Bloomsbury Publishing Plc 2004