Re: Dodge vs. Ford
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Re: Dodge vs. Ford



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The Dodge Brothers got involved with the Ford Motor Company at the beginning
in 1903.  They were noted engine and transmission manufacturers at that
point and got the Ford business on one condition - Ford must be their only
customer.   In exchange for a chunk of Ford Motor Company stock, the Dodge
Brothers turned all their efforts to the Ford Motor Company.  The 1903 Ford
was the model A (yes, Ford had two of them, the second in 1928) while the
Model T went into production five years later, in the fall of 1908.

Just before World War I, Henry Ford decided to go his own way and build all
his own engines, transmissions, etc.  As the Dodge Brothers had no other
customers to turn to, they decided to build their own car, the first car
rolling off the line in November, 1914, after forming Dodge Brothers, Inc..
In order to finance the expansion of their own firm, the brothers sued Henry
Ford for nonpayment of dividends (Henry decided to finance his expansion
with profits that normally would be paid out as dividends.)   The courts
found in favour of the stockholders and the Dodge Brothers received about $2
million in dividends.

Henry Ford then decided that he and his family would be the only
stockholders and proceeded to purchase all outstanding stock of the Ford
Motor Company.   From this the Dodge Brothers received $25 million.

After the Dodge Brothers died in 1920,  the company was run by their right
hand man, Frederick J. Haynes.  The widows held onto the company until
April, 1925, when they sold the firm to a group of investment bankers under
the leadership of Dillon, Read & Co. for $146,000,000.   In turn, D,R,&Co.
sold a chunk of non-voting stock to the public for a profit of $13,250,000.

The banking group began looking for a buyer during 1927, after Haynes had
retired and his successors, the Graham brothers, left DB to start their own
auto company.  Also during this period Walter Chrysler was working on plans
to expand his company and enter the low priced field.  To produce a
competitor to Chevrolet, Essex and Star, he would need forge and foundry
facilties, plus more manufacturing capacity.  And Dodge Brothers had all
that.   Negotiations between Clarence Dillon and Walter Chrysler began in
the spring of 1928, culminating in Chrysler pruchasing Dodge in late July
for $170,000,000 in Chrysler stock plus assuming DB liabilities.   Chrysler
acquired the Dodge Brothers car and light truck lines and the Graham
Brothers truck.

During the negotiations, Chrysler continued with his plans of expansion,
introducing the low-priced Plymouth four, the DeSoto six (a Plymouth with a
6-cylinder engine) and the Fargo light truck in early July 1928.   Contrary
to what many believe, the Dodge Brothers car was priced above the DeSoto at
that time.  Dodge would not return to its normal industry slot, just above
Chevrolet, until 1933 when DeSoto moved up in price to where Dodge was.  The
Graham Brothers truck was renamed Dodge Brothers in January, 1929 and the
Fargo (first series) was laid to rest in December, 1930.

Bill
Vancouver, BC

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