On This Day In History: Walter P. Chrysler Resigns from General Motors, March 25, 1920

Walter P. Chrysler with the brand new Chrysler Six, 1924

Walter P. Chrysler with the brand new Chrysler Six, 1924

Some automobile executives stand head and shoulders above the others. If Walter P. Chrysler was not the very most competent man to ever run a car company, he’s certainly on a very short list. It’s not generally well known but before he started the Chrysler Corporation, bought the Dodge Brothers company and started the economy priced Plymouth line, Chrysler was an important executive at General Motors, eventually being in charge of Buick, GM’s foundational brand. After a successful career in the railroad industry, at the age of 36, in 1911 he was recruited by Buick president Charles Nash (who later started his own eponymously named car company) to become the production manager for the Flint, Michigan automaker at a salary of $6,000 a year. He quickly streamlined production and instituted cost saving methods, like more simple finishing on the parts of the car bodies that could not be seen.

Five years later, in 1916, when Billy Durant, with the aid of the DuPont family, reacquired control of GM from bankers who had previously given him the boot, Chrysler, who was tied to banking interests, offered his resignation. Durant considered Chrysler to be such a key man that he offered him a three year contract with salary that must have been one of the largest of the day, $120,000 a year (about $2.5 million in 2013 dollars), with his choice of a an annual bonus of a half million dollars in either cash or General Motors stock. His total annual compensation was the equivalent of over $13 million in today’s money. According to his account of the meeting, Walter Chrysler was so stunned by the figures that he asked Durant to repeat them and immediately agreed.

After that contract expired, Chrysler resigned from GM on this date in 1920, selling $10 million worth of his stock in General Motors. Wikipedia says that the resignation was over a disagreement with Durant over the future of GM. I’m not sure how accurate that account is because the same year that Chrysler left GM, the DuPont family decided to get rid of Durant and replace him at the head of GM with DuPont protege Alfred Sloan. Either way, Walter Chrysler left GM in 1920, a very rich man.

His first job after leaving GM was at Willys-Overland, where he was hired by investors in the company to turn around the moribund company. Chrysler demanded a million dollar salary and a two year contract. He was held in such high esteem within the industry that the bankers acceded to his demands. An ambitious man, he tried to take  control of the company from John Willys. That takeover attempt failed, so Chrysler bought a controlling interest in the Maxwell Motor Company, another ailing automaker. After turning around Maxwell, it became the basis for the new Chrysler Corporation in 1925. As a matter of fact, he used Maxwell to develop the Chrysler Six, the first car sold under his own name. Three years later he would buy Dodge, the Graham and Fargo truck companies and start the low priced Plymouth brand along with the more upmarket DeSoto, giving the Chrysler Corp. a complete lineup from economy cars to the luxury Chrysler brand. It seems that Chrysler wanted the Plymouth>Dodge>DeSoto>Chrysler hierarchy to compete with the “car for every purse and purpose” business model that Sloan instituted at General Motors in 1924.

Many of Walter Chrysler’s corporate maneuverings and machinations would probably be against the law today, but they were standard practices in his day. Other industrialists and businessman acted as he did, they just weren’t as good at it.

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