A Brief History of
The First 100 Years of the Automobile Industry
in the United States

Chapter 10 - War halts car production and changes U.S. forever

by Richard A. Wright

In the summer of 1940, the Army tested a small, lightweight vehicle developed by American Bantam Co., of Butler, Pa.

American Bantam began life as American Austin in 1930, but even in the depths of the Depression Americans did not like small cars and sales languished. Production ceased in 1935, then the company began building a very jauntily styled small car called the Bantam in 1937.

Jaunty or not, Americans still didn't care much for small cars. The Bantam, a collector's item now, did not sell well then. But the Army liked Bantam's little military vehicle and ordered 1,500 of them. Dubious of American Bantam's production capabilities, it placed similar orders with Willys-Overland and Ford Motor Co.

After rigorous tests and changes in specifications, Willys' version was standardized. But Willys could not satisfy the Army's voracious appetite and Ford was also appointed to build the vehicles, known in Army parlance as "vehicle, 1/4-ton, GP (General Purpose). The "GP" was quickly Americanized to "Jeep."

Willys did design and build the World War ll Jeep version that was finally used and it got the rights to build civilian versions of it after the war. It was soon Willys' most successful vehicle. Later Jeep was acquired by Kaiser-Frazer, then by American Motors and it is now one of Chrysler Corp.'s most successful vehicles.

But Bantam and the Army had laid the groundwork for the Jeep's success. American Bantam went out of business shortly before the war began.

Jeeps were just a fraction of the torrent of war machines which poured from the auto industry. Chrysler Corp. mass-produced tanks and numerous makers built trucks for the military. The Army wanted to standardize its trucks to ease the parts and maintenance problem, but there was no time. Getting the trucks to the battlefields was more important.

An attempt was made to keep trucks of the same make together. Studebaker trucks, for example, were largely sent to allies under lend-lease and Russian auto men say there are still Studebakers in use in the vastness of the former Soviet Union.

After civilian car production ceased in February, 1942, GM ordered its divisions to take any contract they could handle and to concentrate on the toughest tasks. GM built shells, bombs, fuses, navigation equipment, machine guns, artillery and anti-aircraft guns in addition to engines and vehicles.

One of Edsel Ford's last undertakings before he died (at 49, of a broken heart, claimed some romantics, although the proximate medical cause was undulant fever apparently brought on by drinking unpasteurized milk from the Ford dairy herd) was to oversee construction of the huge Willow Run plant which mass-produced bombers.

The auto makers more than doubled their productive capacity during the war and the influx of workers put the most severe pressures on the city in its long history.

(Visitors are often amazed to find that Detroit is older than many of the colonial cities in the East, founded in 1701 as a military post and trading center by Antoine de la Mothe Cadillac, a French adventurer and explorer who recognized the site as well suited for command of the lakes and well removed from the power of the French crown and church centered at the older post at Mackinac.)

Whites from Appalachia and blacks from the Deep South poured into the city and were jammed into already congested neighborhoods - the blacks into "Paradise Valley" on the near east side and Southern whites into the near west side along the Cass Corridor. Woodward Avenue was the dividing line and, for a few days in 1943, a battlefield.

Many black families had settled here in the early 19th century, since Detroit was northern U.S. terminus of the "Underground Railroad" which moved runaway slaves from the South to the North and Canada. From these older families, a black middle class had grown, successful but separate. Racism ran deep.

In 1932, GM seriously considered dropping Cadillac, because of the weak luxury-car market in the depths of the Depression. Nicholas Dreystadt, Cadillac service manager at the time, had noticed that the Cadillac was very popular with middle-class blacks, despite Cadillac's policy of not selling to blacks.

At an Executive Committee meeting called by Chairman Alfred P. Sloan to consider Cadillac's fate, Dreystadt made a surprise appearance with a scheme to save the car. Dreystadt was one of the last of the managers who rose to the top from the factory floor. He still spoke with a German accent, having immigrated to the United States in 1912 at the age of 13 as a member of a Mercedes racing team.

Dreystadt pointed out that since blacks (Negroes in those days) had limited access to high-status housing and other signs of success, wealthy blacks had adopted Cadillac as a status symbol. (Packard was the favored car of the white old-money class.)

Dreystadt pointed out that blacks paid a premium to white buyers to front for them. Demand like this should be exploited, he said. The committee give Dreystadt 18 months to develop the Negro market. By the end of 1934, Cadillac sales were moving up and the division was making money.

Dreystadt was not a civil rights crusader, but unlike many in the auto industry he drew no color line. So when as general manager of Cadillac during the war he accepted a contract to produce aircraft gyroscopes and skilled workers were simply not to be found, he startled the corporation by hiring and training 2,000 aging black prostitutes from Paradise Valley. He and his personnel manager, James M. Roche, also hired their madams, reasoning plausibly enough that they could manage the women.

Dreystadt's unorthodox approach had often put him at odds with the professional managers who were increasingly taking over the auto industry, but this episode put him at odds with just about everyone. In fact, the women did well and eventually surpassed their quotas.

There were plenty of jokes about Dreystadt's "red-light district," but he did not think they were funny. At war's end, the women were let go because returning veterans had preference and the workers wanted them out of the plants. Dreystadt felt he had personally failed these women (several reportedly committed suicide rather than return to their old lives) to whom he had given a taste of dignity and self-respect

The riot started on a hot Sunday in July of 1943 with fights on Belle Isle between white and black youths and servicemen. It was over within the week, but before it ended the city witnessed a race riot as ugly as any in history, 35 people were known to have been killed and for the first time in the nation's history regular troops of the U.S. Army were used to halt a racial conflict. The next time they were used, in 1967, it would again be in Detroit.

The war plants -- and the nation -- needed workers and their color was unimportant. So was their sex. For the first time, women in large numbers entered the male-dominated work world and many of them liked it. In a very real sense, World War II gave the civil rights and feminist movements a powerful push.

It was not widely known, but Ford Motor Co. was near collapse. War work was keeping it going, but just barely. Henry Ford was still firmly in charge and his accounting procedures, cost controls and management systems were baffling to say the least.

Goaded by Harry Bennett, the old man had fired most of his best executives. Only his son, Edsel, and Charles Sorenson were left and they held things together only by superhuman effort. After Edsel died in 1943, the government was alarmed at the possibility of one of its biggest defense contractors collapsing, so it called Edsel's son, Henry Ford II, back from his post as an ensign in the Navy with the mission of saving the Ford empire.

Except for his name and the fact that he was the legendary man's grandson, Henry II had little to recommend him for the task. Based on his paper qualifications and credentials, he probably wouldn't have been hired for a responsible job by any personnel manager. Which shows how misleading paper qualifications can be, because young Henry did indeed have the right stuff to save the empire.

Ironically, it was the end of the war that brought the crisis to a head. Ford costs were high and its product archaic, compared with the competition. Post-war demand for new cars would give the company a few years to reorganize, but there was no reason to think the old man would do it -- or even agree that anything was wrong.

Once again, his wife Clara used her influence and pleaded with her husband to step aside. Edsel's widow Eleanor went even further, threatening to sell her stock unless the old man turned over the company to her son. In 1945, Henry Ford gave in. Henry Ford II took over Ford Motor Co. Two years later, Henry Ford died.

The young man's first task was to wrest the company from Harry Bennett, who been virtually running Ford Motor Co. after Edsel died. Bennett had many talents, but running an automotive empire was not one of them. Henry II fired him. But Bennett did not leave.

John Bugas was an ex-FBI man who had was recruited to work for Bennett, but became a close confidant of young Henry. With his .38 inside his jacket, he went to Bennett's office to tell him he was fired. Bennett cursed him and took a .45 from his desk drawer and set it on the desk in front of him. He talked for a while. Then Bennett left his office, never to return.

Henry II quickly went to work to turn the company around. He responded to a peculiar telegram from Charles (Tex) Thornton, an Army Air Corps colonel, offering for employment a 10-man team of young officers who had run the Air Corps Office of Statistical control. Ford hired them.

They became known as the "whiz kids" and many worked their way to high positions in the company. While Thornton went on to head Litton Industries, two of them -- Robert S. McNamara and Arjay Miller -- became presidents of Ford Motor Co. McNamara, of course, went on to become secretary of defense in the Kennedy and Johnson administrations.

Henry II also hired a GM executive and Sloan favorite (apparently with Sloan's blessing), Ernest R. Breech, to preside over the turnaround. Breech served Ford well, reshaping it in the GM mold. The company was not yet out of trouble. But it was heading in the right direction.

If a car enthusiast found himself suddenly set down in the late '40s at Livernois and Grand River in Detroit, he might think he had died and gone to heaven. For miles in either direction, Livernois was a shining, chromed sea of new and used cars, the greatest auto row in history.

Passenger car production resumed with 1946 models, but with hundreds of thousands of men returning from the war, all hungry for a car, Detroit couldn't come close to meeting the demand. The dealers were suddenly in the driver's seat and many took advantage of the situation.

The stereotype of the schlock-artist used-car dealer entered the American culture. Used-car dealers became local celebrities with their flamboyantly aggressive sales tactics and their use of a fledgling advertising medium, television, to hawk their wares.

Big-volume used-car dealers like Earl "Mad Man" Muntz in Los Angeles became public figures. Mad Man, who was immortalized as the butt of jokes by Bob Hope, later built TV sets and his own sports car, the Muntz. But building cars was much different than selling them and by his own admission Muntz lost about $1,000 a car. Luckily, he didn't sell very many.

It was an exciting time in Detroit. The war was over and everyone wanted to get about the business of peace. (We would be back at war again in five years, but auto production was never again interrupted.)

In Europe, the auto plants were in ruins and there was no industry to speak of in Japan. American and British bombers blasted GM Opel and German Ford factories to rubble with equipment made by their American parent firms.

The Russians stripped auto plants in Germany's Eastern zone of their machinery and such proud old names as Auto Union headed west along with the rest of the refugees.

France nationalized Renault after Louis Renault, charged with collaborating with the Nazis, died in prison.

But in North America, the plants were converting to civilian production, there was plenty of work and plenty of money. Families were being formed, the suburbs were being built, plans for a nationwide system of interstate highways were being seriously discussed and everybody wanted a car.

The auto industry was on the threshhold of its golden age.

Copyright 1996, Richard A. Wright
Published by Wayne State University's Department of Communications