Reo Motor Car Company Plant, Lansing Michigan - History

Ransom Eli Olds was born June 3, 1864, in Geneva, Ohio, to Pliny F. and Sarah W. Olds. Details about Ransom's childhood are sketchy, except that his family moved around a great deal due to his father's search for satisfactory employment. When Ransom was 6, Pliny Olds gave up his blacksmith shop in Geneva and moved the family to Cleveland where he became superintendent of an iron works. Four years later, Pliny resigned due to poor health, farmed for a year near Parma, and then returned to Cleveland again. Finally, in 1880, when Ransom was 16, the Olds family settled permanently in Lansing, Mich., where Pliny opened a machine shop. After finishing the 10th grade in Lansing, Ransom took a 6-month course at Bartlett's Business College in 1882-83 before becoming a combination machinist-bookkeeper for P. F. Olds and Son.

In 1885 Ransom became a partner in the family firm, and soon afterwards it became a leading manufacturer of gasoline-heated steam engines. Soon he developed an interest in self-propelled land vehicles, and in 1887 he built a three-wheel steam car. Five years later he built a four-wheel model with a dual engine and powered on the locomotive principle. Increasingly, however, Olds began to concentrate his attention on gasoline engines and became, says automotive historian Richard Crabb, "one of the country's leading authorities on the internal combustion engine, its design, manufacture, and marketing." In 1896 he built his first gasoline car, and 1 year later he formed the Olds Motor Vehicle Company to manufacture them. At the same time, he took over P. F. Olds & Son, changing its name to the Olds Gasoline Engine Works.

Although Olds' engine company prospered, his motor vehicle operation did not, chiefly because of inadequate capitalization. In 1899 he liquidated it and incorporated a new company, the Olds Motor Works, with financial backing from Samuel L. Smith, a wealthy lumber magnate. Operations were shifted from Lansing to Detroit, and Smith, who owned most of the company's stock became president, while Olds served as vice president and general manager. During its first year in Detroit, the company got off to a shaky start, largely due to Olds' indecision about what type car to produce.

By 1901, however. Olds had perfected the design for the curved-dash Oldsmobile, which sold for $650. It proved a smashing success, says Rae, and made Olds "the first to demonstrate the possibilities of a mass market for a low priced car." Despite destruction of almost his entire factory by fire just as production of the curved-dash car had gotten underway, Olds managed to regroup and manufacture and sell 600 of these cars that year. By 1904 sales of the curved-dash model had reached the yet unheard of figure of 5,000. Much of Olds' success was due to a hitherto unprecedented advertising campaign in national periodicals and a number of highly publicized races and endurance runs.

Heavy demand for the Oldsmobile led Olds to modify the automobile manufacturing techniques in use at that time. From the beginning, he relied on subcontractors and, according to Rae, "carried the assembly of parts from outside supplier firms farther than anything attempted before." In addition, Olds, says his biographer Glenn A. Niemeyer, "devised a progressive assembly system, which contained all the elements of the modern assembly line with the exception of the power conveyor."

Shortly after the Olds Plant in Detroit burned in 1901, the company moved most of its production facilities back to Lansing. Despite his success with the curved-dash Oldsmobile, Olds grew increasingly restive because control of the company remained in the hands of Samuel Smith and his son Frederic. By 1904 bitter feelings between the Smiths and Olds had reached such an impasse that they ousted him from his post as vice president and general manager, and he left the company in a huff.

In August, 1904, Olds organized the R. E. Olds Motor Car Company, a name that was soon changed to Reo in order to avert a threatened lawsuit from the Olds Motor Works. Although a number of individuals invested in the company. Olds held control with 52 percent of the stock as well as the titles of president and general manager. To provide Reo with a reliable supply of parts, he organized a number of subsidiary firms like the National Coil Company, the Michigan Screw Company, and the Atlas Drop Forge Company.

By 1907 Reo had gross sales of $4 million, and Olds headed one of the top four automobile manufacturers in the Nation. One year later, William C. Durant attempted a merger of Buick with Reo, Ford, and Maxwell-Briscoe, but the whole deal collapsed when first Ford and then Olds demanded $3 million in cash for their companies instead of stock in the new combination. After 1908, despite the introduction of improved cars designed by Olds, Reo's share of the automobile market shrank, due in part to the development of giants like Ford and General Motors. Reo's stagnation must be attributed in large part also to Olds himself, because as Niemeyer readily admits his "talents were mechanical rather than administrative, and he concerned himself primarily with technological improvements."

Although Olds added a truck manufacturing division to Reo in 1910 as well as Canadian automobile plant, he gradually lost interest in the company as he turned his attention to other ventures like power mowers, Florida land development, banking, and an investment firm. In 1915 he relinquished the title of general manager to his protege Richard H. Scott, and 8 years later, he gave up the company's presidency as well, retaining only the honorary position of chairman of the board.

Under Scott's direction, Reo from 1915 to 1925 remained profitable though small and earned an excellent reputation for well-built cars and trucks. In 1925, however, Scott launched an ambitious expansion program designed to make the company more competitive with other automobile manufacturers by offering cars in different price ranges. The failure of this program and the effects of the depression caused such heavy losses that Olds came out of retirement in 1933 and recaptured control of Reo from Scott.

Olds' return to power was brief, however. Late in 1934, he resigned from the company's executive committee, because it refused to approve his plan for a new four-cylinder car. In 1936, the same year Reo abandoned the manufacture of automobiles, Olds resigned as chairman of the board. Until his death on August 26, 1950, at the age of 86, he devoted his time to myriad other business interests.

In the years after Olds left Reo, the firm continued to experience serious financial problems. Although World War II truck orders enabled it to make something of a comeback, the company remained unstable in the postwar era. In 1954 the company was sold to the Bohn Aluminum & Brass Corporation of Detroit, and 3 years later became a subsidiary of the White Motor Company. White merged Reo with Diamond T trucks in 1967 to form Diamond Reo Trucks, Inc. In 1975 this firm filed for bankruptcy, and most of its assets with the exception of the Reo plant have been liquidated.