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Why Tesla's Elon Musk Must Sell 6 Million Electric Cars To Make History Page 2

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Henry J. Kaiser and Elon Musk, CEO, Tesla Motors [Kaiser image courtesy Kaiser Permanente]

Henry J. Kaiser and Elon Musk, CEO, Tesla Motors [Kaiser image courtesy Kaiser Permanente]

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Citing repeated battles with the strong-willed entrepreneur, Frazer resigned in 1948, and the last Frazer vehicle was built in 1951. But the company had sold a remarkable 279,000 cars in 1947 and 1948, its first two years of production.

Then new models were launched in 1949 by GM, Ford, and Chrysler, and Kaiser's sales declined to 101,000 that year--and plummeted to 18,000 in 1950.

Still, the company's high point was 1951, when it sold 231,000 cars--but the writing was on the wall. By 1952, wartime production constraints were only a memory, and the small automaker--along with Crosley, Hudson, Packard, and Studebaker--faced brutal competition from bigger and better-capitalized makers.

Kaiser Manhattan - rear

Kaiser Manhattan - rear

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Innovation: small cars

In 1952, Kaiser moved into a market segment ignored by other makers: It introduced one of the first U.S. small cars, known as the Henry J. This was also sold in its first two years by the Sears-Roebuck department store chain, under the Allstate brand (though unlike other Sears goods, it couldn't be delivered by mail). But it didn't help.

From 1947 to 1955, Kaiser's auto operations built a total 748,870 vehicles under the Kaiser, Frazer, Henry J, and Allstate brands. He also bought the Willys-Overland company in 1953, which made not only Willys cars but Jeep utility vehicles.

A further 92,000 Willys cars were sold between 1952 and 1955, but the very last Kaiser and Willys cars were built in 1955. Jeep production continued under a reorganized Kaiser holding company.

2014 Jeep Grand Cherokee EcoDiesel, Catskill Mountains, NY, Jan 2014

2014 Jeep Grand Cherokee EcoDiesel, Catskill Mountains, NY, Jan 2014

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Only survivor: Jeep

Ultimately, Kaiser Jeep sold the Jeep unit to American Motors in 1970. Following a 1980 partnership, Renault bought AMC in 1983, then sold it to Chrysler in 1987 after that company's first bankruptcy and government-backed bailout restructuring.

Chrysler entered its second bankruptcy in 2009, followed by a government-backed restructuring that ceded control to Italy's Fiat. Today, Jeep is owned by Fiat Chrysler Automobiles.

In the end, the historical fact that both Tesla advocates and Musk himself must overcome is summarized neatly in the Wikipedia entry on Kaiser Motors:

Kaiser suffered the ultimate fate of all independent American auto manufacturers in the postwar period. While sales were initially strong because of a car-starved public, the company did not have the resources to survive long-term competition with GM, Ford, and Chrysler.

To that list of competitors today should be added Toyota, the Nissan-Renault Alliance, Honda, Hyundai-Kia, VW Group, and perhaps BMW and Daimler.

Making history is hard

To make history--specifically, to found an auto company that does better than any startup automaker in 90 years--there remains a long road ahead for Tesla Motors and its CEO Musk.

The global auto business: It's a tough arena. Never forget that.

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NOTE: Readers interested in learning more about Kaiser and his car company can look for:

  • Kaiser-Frazer: The Last Onslaught on Detroit, by Richard M. Langworth (Automobile Quarterly Publications, 1975)
  • Henry J. Kaiser: Western Colossus, by Albert P. Heiner (Halo Books, 1991)

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